Our employer has to consult us about proposed changes to the USS pension scheme, and they will do that over a 60-day period starting on Monday 16th March.  UCU has produced guidance on responding to the consultation questions.

Bath UCU branch committee endorses this guidance.  We reject the claim that there is a huge deficit which requires increases in contributions and cuts in benefits.  For a fuller explanation of this, see the helpful note provided by Prof Simon Wood.

If you are not a UCU member please note that UCU has won substantial improvements in this scheme: in particular raising the salary cap from 40K unindexed to 55K indexed. Please consider joining UCU to protect your pension and your pay.

Consultation closes on 22 May.

Further information

A letter from a group of leading authorities on statistics, financial mathematics and actuarial science to Sir Martin Harris, the chairman of the USS trustee board, criticising the assumptions on which the valuation is made

Imperial College London’s official response to USS’s proposals, arguing that USS’s figures ‘are as likely to be modelling artefacts as a reflection of the underlying economic reality’

Warwick University’s critique of the ‘over-pessimistic assumptions and inappropriate methodology’ in the calculation of the USS deficit. Summary available

UCU’s response (compiled by First Actuarial) to the USS Trustee Consultation, providing a detailed critique of the valuation method.

Note in particular:

• the cashflow projections for the next 70 years show USS’s healthy financial position (p.26)
• the inconsistency in the assumptions (section 5)
• the discussion of long-term rates of return from equities and gilts (section 7)
• the distorting effect of the choice of discount rate based on gilt rates (appendix B).

Recent article in ‘The Actuary’ by a former vice-chair of the Bank of England, critical of the thinking behind derisking:

Note in particular the section on ‘misreading of risk’, which is especially relevant to USS.