The new valuation was agreed by the #USS trustee board at a meeting on Wednesday,
The #USS says the move comes after University employers indicated they would potentially be willing to take on more risk and in turn may pay more in contributions to the Scheme.
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#USS is to going back to the drawing board and will consult on a new set of technical assumptions for the 2018 valuation. The 2018 valuation will use "updated" data on investment returns and life expectancy. 3/Deze collectie tonen -
The new valuation has opened the prospect to lower contributions for members than will come into play from April. 4/
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While conducting another valuation, the
#USS said its position remains that it will continue to "act responsibly and in members’ long-term interests to set the price of pensions that safeguards their future retirement, is affordable for employers and acceptable for regulators".Deze collectie tonen -
There is no guarantee that this new valuation process will lead to reduced contributions for members and employers. This will depend on 1. UUK employers agreeing to take more risk 2. Employers putting in place arrangements to guard USS if returns are not as good as expected.
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But the 2018 valuation will have updated life expectancy data, which has reduced liabilities, and the deficit, at many FTSE100 companies already. The 2018 valuation will have to be signed off by the Regulator, which did not agree with the original Sept 2017
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Bill Galvin, chief executive of the USS, has confirmed "Test 1" a controversial methodology used in the 2017 valuation, will be used for the new 2018 valuation. Statement to follow on Test 1.
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Bill Galvin: "A key input to the USS valuation is the risk position of the scheme in 20 yrs’ time, and the trustee’s lens on this has become known as ‘test one’. This is an important factor in the valuation & will remain as part of our methodology going into a new valuation" 1/
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Galvin: "Participating employers are asked to determine their appetite for investment risk (and so volatility and underfunding risk) at that point in time and it is the changes to these assumptions that may affect the outcome."
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