2020 valuation

The Joint Expert Panel (JEP) published their second report (known as JEP2) on 13 December 2019. It makes recommendations about the valuation methodology - the assumptions used to determine the financial state of the scheme and the contributions of employers and employees needed to sustain the scheme.

UUK consultation on JEP2

In January 2020, UUK consulted with USS employers on their views on the second report of the Joint Expert Panel (JEP2) and how its recommendations might be applied to the 2020 valuation. You can view the College’s response to this consultation and UUK’s response to the JEP2 consultation.

USS 2020 valuation discussion

USS asked for comments on their  Valuation Discussion  document and the direction of travel they are taking for the 2020 valuation. View the College's response.

USS 2020 valuation consultation (technical provisions)

On Monday 7 September, USS published a consultation to their 341 Higher Education member institutions on their proposed assumptions for the pension scheme’s Technical Provisions in relation to the 2020 valuation. Access the consultation document [pdf]. In this document, the USS Trustee has set out their initial view on the assets, liabilities, long-term assumptions and the cost of the current benefits structure. 

UUK have now shared some further analysis of these consultation materials [pdf] produced by AON, their independent actuarial advisers. We have reviewed the AON advice and will consider this as part of our response to the consultation.  

On 15 October 2020, Imperial's Provost Professor Ian Walmsley met with USS representatives, along with our Director of Finance Tony Lawrence, and our internal experts Professors Richard Craster, Axel Gandy and David Miles. We raised a number of questions about the valuation, including why the current consultation doesn’t encompass all aspects of the valuation process, the accommodation of only some of the JEP recommendations, and whether the asset modelling approach is appropriate in technique and time horizon. You can view a summary of the USS meeting [pdf] and further details of the Q&As discussed [pdf].

Taking into consideration the information provided by UUK and the discussions with USS, we shared a draft response to the consultation [pdf] with our community. Based on the feedback received from staff and discussions held by the Provost's Board, the Provost submitted our formal response to the USS consultation [pdf] on 30 October. 

Letters to USS‌

On 16 December 2020 Imperial's Provost Professor Ian Walmsley and President Professor Alice Gast wrote to the USS CEO Bill Galvin [pdf] to urge USS to consider the covenant proposals put forward by UUK, endorse the work of the Joint Expert Panel (JEP), and question why only some of the recommendations in their second report have been accommodated. On 25 January 2021 we received a response from Bill Galvin and Kate Barker, Chair of USS [pdf].

‌On 15 February 2021 we wrote a joint letter to USS [pdf] with UCU, to urge the Trustee to implement the proposals recommended by the JEP report as part of the 2020 valuation process.

2018 valuation

  • Following the conclusion of the 2017 valuation, USS consulted with UUK and employers on the 2018 valuation. This valuation included USS’s consideration of the report of the first Joint Expert Panel (JEP).
  • The USS Trustees consulted on three options. The College, after consultation with Heads of Department and staff, stated a preference for Option 3. The majority of HEIs also opted for Option 3 and this was agreed by the USS Trustee and submitted to the Pensions Regulator.
  • UUK then consulted with employers on protective measures to allow the Trustees to conclude that the covenant remains strong, which was a pre-condition to implementing Option 3. Following discussion at President’s Board, the College sent a response [pdf] that supported the package of protective measures subject to further details on implementation.
  • The JNC agreed (by majority vote) on Option 3, that sets total contributions at 30.7% for the next two years and that the change in the rate should be shared 65:35 between employers and members respectively (21.1% for employers, 9.6% for employees from October 2019). You can read the responses from UUK and UCU who are the organisations represented on the JNC.
  • This would avoid a significant, and for many unaffordable, increase to contributions set out in the USS default 2017 valuation position already agreed with the Pensions Regulator from April 2020, while allowing time for the Joint Expert Panel to complete their work and move quickly towards a new valuation in 2020, which is currently underway.
  • The Pensions Regulator also needed to separately approve any new agreement reached between the parties. We have written directly [pdf] to the Pensions Regulator urging them to work with the other parties involved to come to a mutually agreeable valuation as soon as possible and avoid the default 2017 valuation contribution increases. Read the Pensions Regulator's reply [pdf].

The 2018 valuation resulted in a schedule of contributions set out below. This schedule remains in place until a further valuation is completed. 

 1 October 2019 1 October 2021 
 Member contribution   9.6%   11% 
 Employer contribution   21.1%   23.7% 
 
Summary of the table's contents

The increase in contributions, outlined above, were part of the Trustees recovery plan submitted to The Pensions Regulator to address the schemes shortfall in funding of £3.6bn. 

  • The USS Trustee commenced a consultation with UUK on the proposed Recovery Plan for responding to the deficit assessed by it as at 31 March 2018, and on a revised Schedule of Contributions to confirm the contributions coming into effect from 1 October 2019.  UUK have consulted with employers – you can view our response [pdf]. UUK has now formally responded to the USS Trustee.
  • Separately, on 7 June we received a letter [pdf] from national UCU. Having discussed the draft with Heads of Department and received feedback and comments from the wider College community we sent our response [pdf] back to UCU on 19 June. 
  • There have been five meetings in January 2020 between UCU, UUK and USS to discuss and agree the approach for progressing the JEP’s recommendations. Read the statement from the fifth meeting.
  • In December 2019, we wrote to the Pensions Regulator [pdf] calling on them to take a flexible and thoughtful approach to JEP2. They responded [pdf] that they are ‘…engaging with the Joint Expert Panel (JEP) and will consider their recommendations carefully…’.  Their continued support for these new talks and the outcome of the consultation process will be crucial to successfully concluding the 2020 valuation and securing the long-term future of the scheme, and we will continue to remind them of their commitment. 
  • Following the JEP report, UCU, UUK and USS have developed Statements of Purpose and Shared Valuation Principles [pdf] and will continue discussions around scheme governance issues at future talks. 
  • On 10 February 2020 UUK asked all USS employers whether they continue to support UUK’s position of keeping employer contribution rates at 21.1%, or whether they would like UUK to make a new offer to UCU. Imperial’s response was as follows: 
  • On 19 February 2020 UCEA and UUK published a joint open letter to all staff at universities affected by strike action. The letter provides an update on the significant progress to address concerns of university employees on pay, working conditions and pensions. You can find the letter here and also on UUK and USS employers websites. 
  • We submitted our response to the USS debt monitoring consultation on Monday 3 August 2020 - part of the 2018 valuation. View our response.

Accessible documents

Some of the downloadable documents linked to on this page are not accessible. For accessible versions, please contact hrpolicyandreward@imperial.ac.uk.