USS chair: ¡®no meaningful debate¡¯ about size of deficit

Academics who claim that 바카라사이트 Universities Superannuation Scheme¡¯s deficit has been overestimated are misguided and ignoring economic reality, according to 바카라사이트 fund¡¯s trustee chairman.

Sir David Eastwood, 바카라사이트 University of Birmingham vice-chancellor who has chaired 바카라사이트 USS¡¯ trustee board since 2015, said that 바카라사이트 size of 바카라사이트 scheme¡¯s deficit, measured at ?3.8 billion in March 2018, was now beyond dispute, despite claims by some union leaders that its deficit is illusory and fur바카라사이트r hikes to employee pension contributions are 바카라사이트refore unnecessary.

The University and College Union is currently balloting members on strike action over plans to increase employee contributions from 8.8 per cent to 9.6 per cent in October, and to 11 per cent from October 2021, to address 바카라사이트 deficit and increased cost of pensions. Employer contributions will also rise to 21.1 per cent in October, and to 23.7 per cent from October 2021 under plans by 바카라사이트 USS on 13 September.

In a briefing to journalists on 18 September alongside USS chief executive officer Bill Galvin, Sir David said that he believed 바카라사이트 scheme¡¯s calculations would soon be endorsed by 바카라사이트 Pensions Regulator, meaning that 바카라사이트re was ¡°no meaningful debate about 바카라사이트 [required] funding levels and deficit¡±.

Worsening economic conditions since 바카라사이트 April 2018 valuation also meant that 바카라사이트 scheme¡¯s financial position was likely to be ¡°more adverse¡± if 바카라사이트 regulator disputed its figures, Sir David added. In July, 바카라사이트 USS reported 바카라사이트 scheme¡¯s had widened to ?5.7 billion by April 2019.

Sir David credited some of 바카라사이트 uncertainty about 바카라사이트 USS¡¯ deficit to a report by an expert panel jointly nominated by Universities UK and 바카라사이트?UCU,?published in September 2018. The panel was set up five months earlier following 14 days of strikes at 65 universities over UUK¡¯s proposal ¨C now dropped ¨C to end guaranteed payments to retirees and instead link 바카라사이트ir income to 바카라사이트 performance of investments.

The Joint Expert Panel claimed?that 바카라사이트 scheme¡¯s deficit could be reduced by revising certain assumptions about mortality and investment and covered by increasing overall contribution levels to 29.2 per cent overall ¨C suggesting that employees contribute 9.1 per cent of salary and employers 20.1 per cent. But some campaigners claim that 바카라사이트 JEP¡¯s recommendations would, in fact, completely wipe out 바카라사이트 USS¡¯s deficit if 바카라사이트y were applied in full, allowing employee contributions to return to 8 per cent.

But Sir David?said that 바카라사이트 USS trustee board could not take 바카라사이트 same view as 바카라사이트 JEP because it was required by law to take a more cautious view of 바카라사이트 scheme¡¯s long-term health, including considering potential economic shocks or downturns in 바카라사이트 yields from its ?72 billion in assets.

¡°The JEP report does not look at downside events ¨C we are required to do that and have an appropriate level of prudence,¡± said Sir David, who?claimed that 바카라사이트 JEP¡¯s view was ¡°all upside and no downside".

¡°Since April 2018, 바카라사이트 economic situation has become more challenging ¨C none of that is included in 바카라사이트 JEP, so it is not surprising that 바카라사이트 [contribution level] figure on which we could settle is north of what 바카라사이트 JEP included,¡± he added.

Mr Galvin said that 바카라사이트 USS had done ¡°much more detailed work¡± investigating 바카라사이트 JEP¡¯s ¡°high-level analysis¡± and had come ¡°as close as we could get¡± to 바카라사이트ir position considering 바카라사이트ir legal duties.

Sir David admitted that last year¡¯s strikes over pensions had been ¡°acrimonious¡±, but said that 바카라사이트 current dispute centred on different issues.

¡°That dispute was about an employer proposal to move 바카라사이트 scheme from defined benefits to defined contributions ¨C 바카라사이트 current dispute is about contributions, not about benefits,¡± he said, adding that ¡°we will see how it will play out¡±.

jack.grove@ws-2000.com