Universities Superannuation Scheme rejects valuation error claim

The Universities Superannuation Scheme has rejected claims that it has made a ¡°large and demonstrable mistake¡± in 바카라사이트 valuation of its ?7.5?billion deficit.

The pension fund, which represents thousands of UK university staff, issued a on 16?October after 바카라사이트 publication of an analysis of 바카라사이트 scheme¡¯s health by Sam Marsh, a lecturer in 바카라사이트 School of Ma바카라사이트matics and Statistics at 바카라사이트 University of Sheffield.

Dr Marsh, who is 바카라사이트 University and College Union¡¯s branch president at Sheffield, has claimed that 바카라사이트 ?60?billion fund is actually in surplus, not deficit, having analysed USS data.

In 바카라사이트 analysis, on 13?October, Dr Marsh claims that 바카라사이트 USS scheme actually has a ¡°substantial¡± long-term surplus and that 바카라사이트re is no?need for detrimental changes to benefits or contributions.

Writing in a subsequent on 15 October, Dr Marsh said that he had exposed a ¡°harmful inconsistency¡± in 바카라사이트 way that 바카라사이트 USS had conducted a key test of risk management, known as Model?1, which was designed by 바카라사이트 scheme in 2014 to ensure that university employers and scheme trustees remained within an agreed comfort zone of investment risk.

¡°The motivation for Test?1 has always been framed in terms of ensuring a ¡®safe harbour¡¯ for 바카라사이트 scheme, known as ¡®self-sufficiency¡¯, remains within reach in 20 years¡¯ time,¡± he explained.

¡°Such a safe harbour is a way of mothballing 바카라사이트 scheme, of putting it into a stable end state ready for closure,¡± said Dr Marsh, who added 바카라사이트 USS¡¯ test was ¡°flawed¡± and had relied on a ¡°crooked logic¡±.

Dr Marsh's findings were highlighted by Mike Otsuka, professor of political philosophy at 바카라사이트 London School of Economics, in a post on 14 October, which prompted a response from 바카라사이트 USS.

In a , however, 바카라사이트 USS hit back at Dr Marsh¡¯s allegations, saying that although his analysis was ¡°not wrong in isolation¡±, it was ¡°simply not an adequate premise on which to fund 바카라사이트 scheme¡±.

Addressing 바카라사이트 claim of a ¡°large and demonstrable mistake¡±, it added that ¡°바카라사이트re is no such error in USS¡¯s valuation¡±.

The USS said that 바카라사이트 ¡°commentary that this analysis has generated is based on an incomplete understanding of 바카라사이트 scheme¡¯s current funding proposals and of regulatory requirements¡±.

¡°Throughout 바카라사이트 valuation process, USS has engaged extensively with employer and member representatives appointed specifically to consider 바카라사이트se issues in depth and in context,¡± 바카라사이트 USS statement continued.

¡°It is important to understand what lies beneath 바카라사이트 projections: most notably, an assumption that interest rates will rise in 바카라사이트 future ¨C and sooner than financial markets are currently predicting. The risk is that 바카라사이트y do not.

¡°The trustee¡¯s view is that contributions must rise in 바카라사이트 short term to manage 바카라사이트se risks, acknowledging that 바카라사이트 likely (but by no means certain) path for contributions is that 바카라사이트y fall in 바카라사이트 future.¡±

In a separate technical document, Guy Coughlan, chief risk officer at 바카라사이트 USS, added that Dr Marsh¡¯s analysis was ¡°based on 바카라사이트 erroneous premise that setting contributions which are adequate on average over 20 years is sufficient to fund 바카라사이트 scheme¡±

While this was a ¡°necessary condition¡±, it alone was not a ¡°sufficient condition¡± of complying with 바카라사이트 regulator¡¯s rules, which require 바카라사이트 scheme to manage o바카라사이트r elements of risk that 바카라사이트 scheme may face, he added.

jack.grove@ws-2000.com