2017 USS Valuation

Our Universities Superannuation Scheme pension fund has been receiving prominent press coverage, with reports of large deficits and accusations of mismanagement. Yet many pension experts and academic commentators believe that most have been scaremongering and misleading.

The USS is in good shape – if it remains open. It holds a surplus of assets, brings more money in each year than it pays out in benefits and its assets have grown by a rate equivalent to 12% per year over the past 5 years. A UCU commissioned September 2017 report from First Actuarial presents a strong case for affordability and sustainability of the scheme.

Many experts contest that the USS method of valuation is overly prudent. In particular, its self-imposed “Test 1”, inflates the scheme deficit creating an apparent crisis.

For further information, see below:


15th September 2017. Imperial UCU send open letter to the Provost regarding the USS consultation with the employers.

15th September 2017. First Actuarial response to the USS Technical Provisions document.

‘We conclude from the cash flow analysis later in this report, that the current contribution rate from the 2014 valuation remains a prudent contribution rate, given the current benefit design of the USS. In a scenario of “best estimate” pay rises, the benefits of the USS can very nearly be paid from contributions, without reliance on the assets. There is no need to change either the contribution rate or the benefits to have a prudent funding plan. The strong likelihood is that the USS can be invested to outperform the return required to safely deliver the benefits. Given time, the outperformance will increase the funding level to any desired target. Any formulation of the sign off of the valuation which maintains the current contribution rate and the current benefits is acceptable.’

13th September 2017. USS Technical Provisions employer consultation document published

1st September 2017. USS starts consultation with the employers (Universities UK) on the Technical Provisions for the 2017 valuation.


Some related press articles and commentary:

Mike Otsuka’s blogs, including Would a shift from bonds to growth assets keep the USS afloat? published on Wonke Higher Education public policy website.

Henry Tapper’s blogs, including Is the University Superranuation Scheme suffering fantasy deficits?

Professional Pensions: The Purpose of a Pension Scheme

Times Higher Education: The Charybdis at the centre of the USS

The Financial Times: various articles

The Financial Times. Examining the numbers on pension valuations

The Financial Times. Academics urge universities’ pension fund to explain shortfall

Institutional Investor. USS Members Press Pension to Disclose Secret Document

Petition calling for transparency: “USS must show its workings”