The second report of the Joint Expert Panel (JEP) is published today (13 December).
The Panel was set up by UCU and UUK following the 2018 industrial dispute over the USS pension fund. The Panel comprises senior figures from the pensions sector as well as academic experts from within higher education and is chaired by Joanne Segars OBE.
Following its first report into the 2017 USS valuation, the Panel was commissioned by UCU and UUK to produce a further report aimed at establishing “key principles to underpin the future joint approach of UUK and UCU to the valuation of the USS fund”.
The Panel’s report makes a series of interlocking recommendations covering the governance of the Scheme, the valuation methodology and the way forward including:
- the establishment of a new, jointly agreed purpose statement and shared valuation principles;
- creation of a series of joint bodies within USS including a valuation forum and a high-level joint union/employer steering committee to agree issues relating to the future direction of the Scheme;
- improvements to the operation of the Joint Negotiating Committee which comprises UCU and UUK representatives.
- agreement to a more appropriate valuation methodology driven by the agreed purpose of the scheme and a re-articulation of the Trustee’s, employers’ and employees’ risk appetites;
- the adoption of a dual discount rate approach to the USS valuation which would distinguish between past and future service, better reflect the demographics of the Scheme and automatically evolve as the Scheme matures; and
- investigation of different approaches to contributions in order to address the high level of Scheme opt outs among younger and lower paid staff.
The Panel considered a great deal of evidence on the sharing of the USS risk across the sector and wishes to affirm its belief that the mutuality of the scheme remains a great strength and that moving away from this could damage its future.
The Panel has set out a road map for the parties to work jointly towards implementing its recommendations and believes that a failure to urgently address the issues raised in this report would be a disaster for members, employers and the sector. The Panel therefore proposes that the Stakeholders and Trustee come together in a facilitated process.
Joanne Segars, chair of the JEP said:
“Our recommendations, which should be considered as a package, are rooted in the belief that the USS is of crucial importance to members, employers and to the health of the higher education sector. We propose significant changes to governance and valuation methodology, each of which may be difficult for individual parties to accept. However, as work on the 2020 valuation commences, employers, unions and the Trustee must urgently come together through a facilitated process to make them work.
“The JEP does not underestimate this task, but we believe that it would be failure for Scheme members, sponsoring employers and the sector if our recommendations are not seriously considered”.
- The Panel’s members are: Joanne Segars OBE (Independent Chair), Ronnie Bowie (appointed by UUK), Sally Bridgeland (appointed by UUK), Chris Curry (appointed by UUK), Bryn Davies (appointed by UCU), Saul Jacka (appointed by UCU), Deborah Mabbett (appointed by UCU). Biographies are here
- The Panel’s purpose, as set out in the terms of reference, was to establishing “key principles to underpin the future joint approach of UUK and UCU to the valuation of the USS fund”.
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