What is a valuation?
A valuation aims to assess how much money a pension scheme currently has and whether this is enough to pay the benefits that have been promised to its members and their dependants. They are legally obliged to happen at least every three years.
What does it assess?
A valuation assesses whether a pension scheme has enough money to pay the pensions that members and their dependants are expecting, both now and long into the future.
This is often a complex process and is not necessarily an objective assessment; the 'contract' between a pension scheme and its members can last over 60 years and the valuation must predict whether the funds it has now and will accrue over that time will be enough at the point its members retire. It must take into account interest rates, market volatility and other factors that may impact the value of the fund over that time period.
Why must it do this?Ultimately, a pension scheme must be sure that it can pay the benefits it has promised members.
You may also be interested in further information on valuations from these external sites:
We also have more information on the current USS valuation on our website: