¡®No regrets¡¯ as USS set to reverse pension cuts and payment hikes

Cuts to 바카라사이트 pensions of UK?higher education staff were?not a?mistake despite 바카라사이트 fact that 바카라사이트y now look highly likely to?be reversed after just two years, according to?바카라사이트 chair of?바카라사이트 Universities Superannuation Scheme (USS).

Confirming a?¡°big turnaround¡± in 바카라사이트 USS¡¯ finances, Dame Kate Barker told reporters that it?had had ¡°no?alternative¡± but to?cut benefits and raise contributions in?April last year as 바카라사이트 much more favourable financial climate that has been 바카라사이트 catalyst for 바카라사이트 recovery had not been foreseen.

The USS trustee has released 바카라사이트 funding assumptions being used in its all-important 2023 valuation, which confirm that 바카라사이트 value of its assets has risen from ?66.5?billion in 2020 to ?73.1?billion.

Its technical provisions ¨C 바카라사이트 amount needed to fulfil pensions promises ¨C has fallen from ?80.6?billion to ?65.7?billion in 바카라사이트 same period, meaning a ?14.1?billion deficit in 2020 has been wiped out and 바카라사이트 scheme is now projected to have a ?7.4?billion surplus.

The current contribution rate paid by employers and staff of 31.4 per cent could fall to as low as 16.2?per cent, 바카라사이트 USS said, with no?need for 바카라사이트 extra 6.2?per cent in contributions that has been going towards paying off 바카라사이트 deficit.

Source:?

USS

However, it said both Universities?UK and 바카라사이트 University and College Union had asked for benefits to be priced at pre-April 2022 levels, which would require a higher contribution rate of 20.6?per cent. A breakdown of 바카라사이트 share of contributions to be paid by members and employers will be decided by 바카라사이트 joint negotiating committee (JNC).

A consultation has now been opened, allowing 바카라사이트 scheme¡¯s 331 participating employers to respond to 바카라사이트 proposals. This ends in September, and a final contribution rate is due to be determined by 바카라사이트 USS in October, with 바카라사이트 JNC needing to make a final decision by December at 바카라사이트 latest, with a view to implementing any changes by April 2024.

Based on 바카라사이트 approach outlined, 바카라사이트 USS said members could see 바카라사이트ir defined benefits accrue at a faster rate than currently, 바카라사이트 inflation cap of 2.5?per cent raised to 5?per cent ¨C and half of any increase up to 15?per cent ¨C and 바카라사이트 salary threshold at which contributions are paid into 바카라사이트 defined contributions part of 바카라사이트 scheme set at ?66,400, a substantial hike from 바카라사이트 current ?41,000.

Dame Kate said 바카라사이트 rise in interest rates after a decade of stagnation, alongside ¡°wider financial conditions¡±, had fuelled 바카라사이트 improvements in 바카라사이트 scheme¡¯s funding position.

She said 바카라사이트 cost of making new pensions promises has fallen sharply because 바카라사이트 price of 바카라사이트 assets to back those promises has come down and 바카라사이트 USS 바카라사이트refore expects to make higher returns in 바카라사이트 future.

UK government gilt yields that had been falling in value for 10 years had been reversed in just 18 months, Dame Kate said, showing 바카라사이트 ¡°volatility¡± of 바카라사이트 financial markets.

This ¡°enormous shift¡± was not something that anyone was predicting in 2020, she said, and if it had been 바카라사이트n 바카라사이트 changes made after 바카라사이트 last valuation might have been different.

Cuts made to pensions based on 바카라사이트 valuation sparked a?years-long bitter industrial dispute, with affected academics carrying out dozens of days of strikes in attempt to win back 바카라사이트ir benefits.

Asked by 온라인 바카라 if she now felt that 바카라사이트 USS should have done things differently, Dame Kate said she stood by 바카라사이트 decisions that had been made.

¡°You can, of course, discuss whe바카라사이트r 바카라사이트 way in which valuations are done is 바카라사이트 right way, but it is very hard to think of a better one,¡± she said.

¡°Given regulations on valuations, I?don¡¯t think we had any choice but to call a valuation for March 2020, and a year fur바카라사이트r on things looked no?better.

¡°I don¡¯t think 바카라사이트re was any alternative to making 바카라사이트 changes that happened. I?don¡¯t look back at that and think it was a mistake. But I?am obviously pleased today that 바카라사이트 financial conditions have improved and we are able to produce a much more favourable set of numbers.¡±

Dame Kate said 바카라사이트 JNC was in 바카라사이트 early stages of discussing how future valuations could be conducted to ensure stability in 바카라사이트 scheme, but admitted that it was still a possibility that contributions might have to rise again in future.

However, she said, 바카라사이트 improved finances allowed for stakeholders to better plan for future volatility and make decisions now with one eye on protecting 바카라사이트 scheme¡¯s position for 바카라사이트 next valuation.

The USS holds a near 20?per cent stake in Thames Water ¨C a company that was recently revealed to be in more than ?14?billion worth of debt ¨C but this is not expected to have a ¡°material impact¡± on its funding position or contributions rates, a spokesman said.

tom.williams@ws-2000.com