Chair’s report: 28 June 2018

The Panel reflected upon a range of issues relating to the verbal and written evidence they had received so far, including submissions from stakeholders.

Taking account of the Panel’s Terms of Reference which require the JEP to take account of a range of factors, the Panel discussed the valuation with reference to the unique character of the HE sector, assessments of equality and intergenerational fairness, the need to strike a balance between stability and risk, and the current legal framework, including the role of TPR.

The Panel also discussed and reflected on the evidence it had heard regarding the valuation methodology which underpinned the USS valuation including questions around the role of the three tests, de-risking, the time horizon of the covenant, the fund’s approach to integrated risk management, and comparisons between USS and other large-scale schemes.

The next series of meetings will see the Panel hearing from the Trustee and its advisers. The Panel will also consider evidence provided to it through its call for submissions. The Panel noted that its understanding of the key issues had been significantly enhanced by submissions made by stakeholders.

The Panel remains keen to hear from stakeholders on issues relating to the valuation, including the tests which underpin it, the assumptions and process. Submissions should be sent to All submissions will be treated in strictest confidence.

Joanne Segars
Chair, JEP

Chair’s report: 22 June 2018

The JEP has continued to gather evidence relating to the 2017 valuation. Evidence was taken from actuarial advisers First Actuarial, who act for UCU, and AON, who act for UUK.

Both firms of actuaries were asked for their views on a number of key aspects of the valuation including:

  • the three tests used by USS, and, in particular, Test 1;
  • the underlying assumptions used in the 2017 valuation; and
  • any alternative approaches that the Panel should consider.

While First Actuarial and AON each had distinctive views, the Panel considered that there were a number of common points and views on certain key areas and that this may be helpful in developing the Panel’s assessment and recommendations.

In addition the Panel considered the submissions received from stakeholders. The Panel was pleased to see good engagement from members and employers with the Panel’s work. The Panel will invite a number of those who have submitted evidence to provide further evidence (written or oral).

Having now met both the USS Executive and the actuarial advisers of UCU and UUK, the Panel took stock of the progress so far and considered how several issues would be assessed against the Terms of Reference. They will be reflected upon and evidenced in the September report being prepared for UCU and UUK.

The Panel continues to make good progress against the Terms of Reference.

The Panel reiterated their call for submissions from member and employer stakeholders on the following issues: the three tests used by USS (in particular relating to Test 1); the prudence or otherwise of the assumptions used by USS; the strength of the covenant; and alternative valuation models and assumptions to those used by USS.

Submissions on these matters or comments for the attention of the Panel are warmly welcomed and should be sent to All submissions will be treated in the strictest confidence.

Joanne Segars
Chair, JEP

Chair’s report: 12 June 2018

The Joint Expert Panel (JEP) held its second and third meetings on 6th and 7th June.

The Panel took evidence from representatives from USS (including USS executives and the Scheme Actuary) about the basis for the 2017 valuation, the covenant and the associated tests. The JEP has received a commitment from USS that it will provide the Panel with the information it needs to undertake its analysis and to fulfil its Terms of Reference.

Among the issues discussed by the Panel were the:

  • role of the Trustee’s Test 1 and evidence of any alternative approach considered by the Trustee;
  • extent to which a goal of self-sufficiency may or may not be appropriate for a unique sector;
  • covenant as the foundation of the valuation framework, including the basis for establishing risk appetite and risk capacity, the timing of de-risking and the volatility and risk associated with low risk investment strategies and alternative approaches;
  • assessments made of the strength of the sponsor covenant, given the unique features of the sector, including the relationship between the growth of the fund’s assets and the growth of the sector;
  • method used for calculating the technical provisions (TP) including the discount rate used, the TP relationship with the self-sufficiency liability and reliance on the employers, and the financial models used to calculate the discount rate;
  • quality and range of demographic data on USS members including mortality and retirement assumptions; and
  • Rule 76 of the Trust Deed and Rules (i.e. the USS cost-sharing rule) and its implications.

The Panel also heard from USS representatives about the legal and regulatory framework within which the valuation takes place. The discussion covered the uniqueness of the governance structure; the role of the JNC as a representative body; and the respective roles and involvement of employer and member representatives in the valuation process.

Finally, the Panel also took evidence from the Pensions Regulator (TPR) about their views of the valuation, including their assessment of the strength of the covenant, their attitude to different investment policies and their general approach to valuations.

The Panel agreed that their next meeting would take up the issues from these meetings with the actuarial advisers of UCU and UUK.

The Panel reiterated their call for submissions from member and employer stakeholders on the following issues: the three tests used by USS (in particular relating to Test 1); the prudence or otherwise of the assumptions used by USS; the strength of the covenant; and alternative valuation models and assumptions to those used by USS.

Submissions on these matters or comments for the attention of the Panel are warmly welcomed and should be sent to All submissions will be treated in the strictest confidence.

Joanne Segars, Chair, JEP
12 June 2018

JEP holds first meeting

The Joint Expert Panel (JEP) held its first meeting on Thursday 31 May.

The panellists noted that the JEP’s first task would be to make an assessment of the 2017 valuation, examining the basis of the valuation, assumptions and associated tests. The Panel also discussed and agreed an initial work plan for this task, noting the requirement in the Terms of Reference that a report needed to be prepared for UCU and UUK in September.

The Panel’s first set of meetings would be with USS (including their advisors) and The Pensions Regulator‎ (TPR) in order to establish the principles behind the current valuation and obtain the Regulator’s view.

UCU and UUK’s actuaries will then be called to advise the Panel on their approach and views on the 2017 valuation.

Suggestions were sought from JEP members for any academic or other experts in these areas who the Panel should meet.

The Panel also wished to meet representatives of the Trustees themselves in addition to executive officers of USS, and arrangements are in hand to meet the Trustee.

The Panel agreed that initial submissions from stakeholders should be sought on the 2017 valuation and in particular on: the three tests used by USS; the prudence or otherwise of the assumptions used by USS; the strength of the covenant; and alternative valuation models and assumptions to those used by USS.

Submissions on these matters or comments for the attention of the Panel are warmly welcomed and should be sent to

Joanne Segars
Chair, JEP
4th June 2018

USS JEP chair appointed

Joanne Segars OBE has agreed to be the Chair of the Joint Expert Panel (JEP) to examine the valuation of the Universities Superannuation Scheme (USS).

Joanne is a widely respected figure in the pensions community. She is currently the Chair of LGPS Central Ltd, which pools the investments of nine large Midlands-based local authority pension funds.

Prior to this, she worked for many years in senior positions in the pensions sector, including as Chief Executive of the Pensions and Lifetime Savings Association (PLSA) (previously the National Association for Pension Funds (NAPF)) for over 10 years and as Head of Pensions at the Trades Union Congress (TUC). Joanne is a current board member of NOW: Pensions, and the Environment Agency.

The JEP is tasked with agreeing key principles to underpin the future approach of the University and College Union (UCU) and Universities UK (UUK) to the USS valuation. As outlined in the panel’s terms of reference, a report from the JEP is expected in September 2018.

The panel was set up under an agreement reached between UCU and UUK at the Advisory, Conciliation and Arbitration Service (ACAS) in March 2018. Ms Segars was formally recommended to UCU and UUK by ACAS.

Further details, including the appointment of UCU and UUK panellists and the work plan for the JEP, will be announced later this month.

Joanne Segars said:

“I am honoured to have been appointed as the Chair of this important panel.  I am acutely aware of how important USS is to the sector and to those who work in it. Given the impact that the valuation has on future benefits and contributions, it is vital that stakeholders have confidence in the way it is carried out and I hope the JEP will make a major contribution to achieving this.

“If we are to be useful to UUK and UCU it is important that the panel members feel able to effectively challenge both each other’s views and those of our witnesses in a confidential environment. However, I also recognise that there is, quite rightly, considerable interest both from USS members and employers in the work of the JEP so I intend to provide regular reports about our progress and the issues we are discussing as well as a clear explanation of the evidence upon which we base any recommendations.  I believe it is critical that USS members and employers feel that they can influence the work of the JEP and I will warmly welcome submissions on any issue relevant to our work.”

UCU general secretary, Sally Hunt, said:

“Chairing the JEP requires someone who understands not just pensions but also the industrial relations environment in which USS operates. Joanne Segars has that unique combination of skills having given many years’ service to the trade union movement and also acted as a leading advocate for the interests of pension schemes and their members.  It is very important that the JEP enjoys the confidence of USS members and I particularly welcome Joanne’s commitment to provide regular reports to stakeholders as well as to seek submissions from fund members and others. UCU is entering the JEP in good faith and we hope that it will enable not just our current dispute to be resolved but also provide a basis for future agreement on the fund.”

UUK chief executive, Alistair Jarvis, said:

“Joanne is widely respected in the pensions world, with over a decade’s experience representing both employer and trustee views leading the PLSA (previously NAPF). She has a detailed understanding of the challenges facing pension schemes and will bring considerable experience and leadership to this important role. For employers, the JEP offers an opportunity to build confidence, trust and increase transparency in the valuation process. The work that Joanne will lead provides an opportunity to consider the questions raised about the valuation by scheme members and employers.”


  1. USS is one of the largest private pension schemes in the UK and is the principal scheme for academic and comparable staff in UK universities and other higher education and research institutions.
  2. The University and College Union (UCU) represents the interests of USS members.
  3. Universities UK represents the collective view of more than 350 higher education employers.
  4. On Friday 23 March, Universities UK and UCU published the proposal for the Joint Expert Panel.
  5. Earlier in May UCU and UUK agreed to the panel’s Terms of Reference.
  6. Further information about the panel’s work – including details of the six panellists – will be announced shortly.