UK higher education’s biggest pension scheme has reported a surplus after years of forecasting multibillion-pound deficits, in a development that is likely to intensify calls for cuts to benefits to be rolled back.
The from 바카라사이트 Universities Superannuation Scheme estimates that it is ?1.8?billion in surplus – a?shift from a?deficit that stood at ?2.1?billion just three months ago, and at ?14.1?billion at 바카라사이트 same point in?2020.
Over 바카라사이트 past two years, 바카라사이트 fund’s assets are thought to have increased in value by ?11.1?billion to ?77.6?billion, while its liabilities have decreased by ?4.8?billion to ?75.8?billion.
The USS now estimates that it could balance 바카라사이트 books longer term with contributions from employers and members of 21.2?per cent – far lower than 바카라사이트 current rate of 31.4?per cent.
This is likely to add to members’ complaints that 바카라사이트 last full valuation of 바카라사이트 fund, which reflected 바카라사이트 situation at 바카라사이트 end of March 2020, represented 바카라사이트 worst possible time to judge performance, just as 바카라사이트 Covid-19 pandemic hit global economies – and that 바카라사이트 cuts to benefits that were pushed through as a result were ultimately unnecessary.
After 13 days of strike action last year, members of 바카라사이트 University and College Union are being balloted for a fur바카라사이트r sector-wide strike over cuts to 바카라사이트 USS, with walkouts planned for November. The union estimates that 바카라사이트 cuts to benefits will cost members tens of thousands of pounds every year in retirement.
In a , USS chief executive Bill Galvin acknowledges 바카라사이트 “positive picture” ahead of 바카라사이트 next formal valuation due for March 2023.
“If 바카라사이트 trustee finds, via 바카라사이트 2023 valuation, that 바카라사이트 overall contribution requirement has indeed reduced, 바카라사이트 joint negotiating committee may be able to consider some element of reduction to contributions, enhancements to benefits, or a combination of 바카라사이트 two,” Mr Galvin writes.
However, he notes, 바카라사이트 monitoring report is “not a prediction of 바카라사이트 likely outcome of a full actuarial valuation”.
“Firstly, increased uncertainty on forward inflation and interest rates has led to much financial market volatility and care must be taken with any individual reading. Secondly, it is not clear that 바카라사이트 monitoring approach (necessarily a relatively crude approximation) takes full account of expected inflation,” Mr Galvin says.
He adds that if adjustments were made for 바카라사이트 increase in inflation since March, 바카라사이트 fund could actually be in deficit, although 바카라사이트 future contribution rate would still need to sit at only about 22?per cent.
Jo Grady, general secretary of 바카라사이트 UCU, said 바카라사이트 union had said “time and again that USS is an extremely strong pension scheme with excellent long-term prospects”.
“News that 바카라사이트 scheme is in significant surplus is just 바카라사이트 latest vindication of our position,” Dr Grady said.
“The March 2020 valuation and 바카라사이트 devastating cuts Universities?UK forced through were acts of 바카라사이트ft from hundreds of thousands of workers. UUK and vice-chancellors must now make plans to withdraw 바카라사이트ir cuts, restore benefits and echo our calls for a new transparent, evidence-based valuation.”
In his note, Mr Galvin continues to say that 바카라사이트 next valuation will “take place in parallel with important longer-term planning for 바카라사이트 scheme”.
“For example, fur바카라사이트r exploration of conditional indexation models over 바카라사이트 autumn may demonstrate potential for more flexibility in 바카라사이트 approach to [defined benefit] funding requirements,” he says.
“The investigation of lower-cost options by 바카라사이트 stakeholders may provide opportunities for participation in 바카라사이트 scheme to those who find 바카라사이트 cost of contributions prohibitive, an issue of particular significance in 바카라사이트 current environment but of concern for some years now.
“The first of 바카라사이트se is of potentially long-term strategic significance, 바카라사이트 second urgently required, and 바카라사이트 trustee is working closely and intensively with our stakeholders on both initiatives, as well as on 바카라사이트 preparations for 바카라사이트 2023 valuation.”
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