We submitted some specific questions to management in December. We have now published their response (below).
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SENT ON BEHALF OF SARAH SMITH, UNIVERSITY SECRETARY
Thank you for your email of 5th December in which you asked a number of questions about the current discussions on USS.
You asked questions about the Court Sub Group. The Court Sub Group is made up of Court lay members: Alan Johnston (chair), Robert Black and Doreen Davidson. The Court Sub Group acts under delegated powers from full Court. The Court Sub Group reported back the key items at the December Court meeting. Court noted the response and discussed the importance of ensuring good communications with staff. CMG were kept informed on this issue through the Finance Director’s report. It would not have been appropriate to seek CMG’s agreement as that decision rests with the Court Sub Group.
You asked a number of further questions about the points made in the Senior Vice-Principal’s communication to all staff on 13 November, in particular about the University’s view about the subsequent proposal that was tabled on behalf of the employers by UUK. We understand that no agreement was reached at today’s meeting between UCU and UUK at the Joint Negotiating Committee and that the JNC is now expected to come to a decision on 23rd January, with further discussion between UCU and UUK in the interim. When we have a final decision on a firm proposal, our Court Sub Group will reconvene to consider this and we would be very happy to meet to discuss the detail further with you.
You ask a number of specific questions about the assessment of the sustainability of the scheme, referring to your understanding that a best estimate valuation gives the fund an £8billion surplus and that it takes in more than it gives out. Our understanding from the most recent USS actuarial valuation is that the scheme is in deficit in the order of £7.5billion as the fund needs to be valued on forward funding requirements and costs of the scheme, not solely on today’s activity level. As a ‘last man standing scheme’ USS requires collective responsibility – however the range of employers across the 300+ member institutions is huge with large differences in affordability, assets which could be offered as security and variations in approach. In the UoE response we were mindful of the potential impact on other employers and their ability to continue to participate (and the knock-on effect that would have if they couldn’t). The Pensions Regulator has re-assessed its view of the Employer covenant and is less convinced of the covenant strength that at the 2014 valuation. The opinion of The Pensions Regulator is not one we can or would ignore. It is inappropriate to view the Pensions Protection Fund (PPF) as a backup in this context as it only applies when there is a qualifying insolvency event in relation to the Employer, and where there are insufficient assets in the pension scheme to cover the Pension Protection Fund level of compensation. We remain committed to our covenant commitments.
You ask a number of supplementary questions. We would be happy to come back to you on these but think that that would be most productive when we have seen the full detail of whatever final proposal emerges. In the interim we would like to reiterate the view of the Court Sub Group: that the outcome of the current discussion should be one which is seen by staff to be fair and in the best interests, and should also provide stability for the future.