2020 valuation

A valuation establishes whether, on a certain date, the scheme has enough money to pay the pensions promised to members. That date is the ‘valuation date’. For our 2020 valuation, the valuation date is 31 March 2020.

Like all similar schemes, we legally have to carry out a full valuation at least every three years. We can do them more often if we feel that’s necessary.

The law says that, if the valuation shows that a scheme does not have enough money to cover its liabilities, it must put a plan in place to improve its funding. And the law says that we need to take a prudent approach to assessing how much money we will need.

By law, a valuation must take no more than 15 months from the valuation date. So our 2020 valuation must be complete by 30 June 2021. There are a number of milestones we need to reach along the way. These include consulting with UUK and giving the JNC time to decide what they want to do in response to the valuation figures.

As the trustee of USS, our job is to manage and administer the scheme. We collect and invest the contributions from members and employers, and we make sure members get the benefits they are due at the right time. We don’t set the level of benefits in the scheme, but we do tell the employers how much the benefits will cost. Valuations are part of that role: identifying whether the scheme has enough money to pay the benefits already built up, and what the cost of benefits built up in future is likely to be.

Universities UK is the body that represents the sponsoring employers in the scheme. These are the employers that provide the scheme to their employees. UUK’s role in the scheme, and in the valuation, is set out in the Scheme Rules and legislation. By law, we must formally consult with UUK during the valuation process, and properly consider their feedback. We also continually engage with UUK during the process. UUK also appoints representatives to the Joint Negotiating Committee (JNC). The JNC has the job of deciding how any change in future contributions should be shared between employers and members and whether there will be any changes to future benefits.

University and College Union (UCU) is an important stakeholder in our valuations, though the law and USS rules don’t give it the same formal role as UUK. We engage with UCU throughout the valuation process. UCU representatives also sit on the JNC, so help to decide how any change in future contributions should be shared between employers and members.

The Pensions Regulator (TPR) is the government regulator that oversees schemes like ours, including making sure that valuations are carried out correctly and that schemes are funded appropriately. We must submit our finished valuation to TPR by the deadline. During the process, we keep in touch with TPR to let them know what is happening, and discuss the key issues with them.