The 2017 valuation showed that the USS scheme had a £6.1bn deficit. Since the last valuation in 2014, economic conditions for defined benefit pensions have worsened. As a result, the position at the 2017 valuation is much worse than expected.

Every three years, the USS carries out a valuation to establish at a particular point in time whether it can reasonably expect to have enough money to pay the pensions that all members have already built up in the scheme, and how much is needed to continue to provide the current level of pensions in future for members still actively paying in.

As well as being a specific legal requirement, the valuation gives the USS, UUK and UCU representatives the opportunity to formally take stock and, through the JNC, consider whether the findings mean any adjustments need to be made to future contribution rates, to future benefits – or both.

The USS is required to sign off the valuation and submit its report to The Pensions Regulator (TPR) within 15 months of the valuation date.

The scheme is required by law to work on the basis of prudent assumptions for investment performance rather than best estimates. Where other factors are involved – for example, mortality forecasts – these reflect the most up to date actuarial data. Under pensions law, the scheme actuary has to sign off the basis of the valuation, which is not a “worst case scenario”, but does by law have to include an element of prudence. We understand that there is scepticism about the need to reform and we have called for greater transparency on the data and information leading to the valuation assumptions.