Glossary of parties involved
Universities UK (UUK)
UUK is the collective voice of 136 universities in England, Scotland, Wales and Northern Ireland. It is the nominated formal representative for over 350 employers participating in the USS pension scheme.
University and College Union (UCU)
UCU is a trade union that represents staff at UK universities. It is the nominated formal representative for USS scheme members.
Joint Negotiating Committee (JNC)
The JNC decides how increases in costs to the scheme should be met after the USS scheme has established the contribution rate required for the current level of benefits. The JNC’s options are to increase contributions or change future benefits or a combination of both. The JNC can also feed in its views on a number of other areas in the scheme, including the level of risk to take when calculating the contribution rate required.
The JNC is made up of five representatives from UCU, five representatives from UUK, and an independent chair.
Joint Expert Panel (JEP)
The JEP is a panel of independent experts, who have been reviewing the 2017 USS valuation since May 2018. It is comprised of six actuarial and academic experts – three nominated by UUK, and three by UCU. The panel is led by a jointly agreed chair, Joanne Segars OBE. Access the terms of reference for the JEP
The JEP’s current work
The JEP has now started phase two of its work. This will be divided into two interlinking parts:
- The valuation process and governance.
- How the long-term sustainability of the Scheme might be secured through the development of a shared set of principles. The JEP will revisit the valuation of technical provisions and other aspects of the valuation methodology, including Test 1.
The JEP is now due to provide its second report later in 2019. Read the update from the JEP
The JEP’s first report – September 2018
The JEP published its first report on 13 September 2018. The report includes an assessment of the methodology, assumptions and process underpinning the 2017 valuation. The report also explores the scope for possible adjustments to the methodology which would allow the valuation to be concluded.
You can read the full report online. In summary, the JEP unanimously recommended four areas where adjustments to the valuation should be considered:
- A re-evaluation of the employers’ attitude to risk, which would result in a re-evaluation of the reliance on the sponsor covenant.
- Adopting a greater consistency of approach between the 2014 and 2017 valuations, which affects the scale and timing of deficit recovery contributions.
- Ensuring fairness and equality between generations of scheme members by smoothing future service contributions.
- Ensuring the valuation uses the most recently available information which means taking account of recent market improvements, new investment considerations and the latest data on mortality, for example.
In the statement releasing the report, the JEP said:
“Adjustments in each of these areas would have a material impact on the valuation and resulting contribution increases. The level of benefits is a matter for the stakeholders to negotiate. However, it is the Panel’s belief, based on independent actuarial analysis, that the full implementation of these adjustments could mean total required contributions estimated at 29.2% to fund current benefits (minus the 1% match). This compares to the current rate of 26% (18% of salary paid by employers, 8% by employees) and the rate of 36.6% from April 2020 which is proposed by USS, based on the valuation as it stands.”
UCU, UUK and USS have responded to the report:
We have created a modeller so that you can enter your own salary and see the potential impact of the JEP proposals (were they to be accepted by all parties). Download the modeller [Excel]
The Pensions Regulator (TPR)
The Pensions Regulator is a public body, sponsored by the Department for Work and Pensions, set up to protect people’s savings in workplace pensions. One of the Regulator’s key priorities is to reduce the risk that pension schemes will require taxpayer support to meet their obligations.
The Universities Superannuation Scheme pension is used by 350 employers nationally and it is the second largest private pension scheme in the UK by fund size. At Imperial, all staff in the academic and research job family, and staff at levels 4 and above in the professional, technical and operational job families are eligible to join the scheme.
The legal obligation on the USS Trustee is to ensure that the pension fund is financially stable in accordance with rules set by the Pensions Regulator.