UCU submission to Work & Pensions Cttee

ESSENTIAL READING FOR EMPLOYERS AS WELL AS THOSE ON STRIKE

"In what follows we outline our concerns about the role of @TPRgovuk in the governance of USS and in its 2017 and 2018 valuations..." 1/
http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/work-and-pensions-committee/the-pensions-regulator/written/106906.pdf

UCU submission focuses on:

1/ TPR’s response to the 1st report of the #JEP
2/ handling of complaints by Prof Jane Hutton, former UCU-appointed director of the USS Trustee Board 2/

A few of the submission's key points:

TPR has not responded adequately to criticisms levelled by JEP report – including TPR's pessimistic assessment of employer covenant and growth of the scheme, and timing and consequences of its interventions in the valuation process 3/

TPR's decisive and problematic intervention in form of its Sept 2017 letter has had ongoing effects: on basis of ltr & the flawed Sept consultation, USS brought forward its plans for ‘de-risking’, driving up the required contribution rate up by several percentage points 4/

USS to this day stands by its insistence on immediate, rather than delayed, de-risking.

Insofar as USS has provided TPR w fresh information, it appears to be based on USS's own more pessimistic methods and assumptions, rather than those advocated by the JEP 5/

'These egs reflect a pattern..TPR tends not to search for..or follow up on evidence that may support USS’s viability as an open DB scheme. Instead, it takes a strong interest in evidence that appears to point in..other direction, even when..flawed, incomplete, or misleading" 6/

That UCU has challenged USS's & TPR’s conclusions might relate to TPR's reluctance to engage w UCU. "TPR did not meet UCU between the beginning of the 2017-18 industrial dispute and the summer of 2019, despite repeated requests to do so" 7/

Prof Hutton, UCU & JEP have all questioned USS’s de-risking plans. The merits of these plans can't be properly w/o detailed stochastic modelling comparing risks, benefits & costs of USS’s plan w other potential plans (including no de-risking) 8/

When establishing and consulting on 2017 & 2018 valuations, "USS did not provide such modelling to stakeholders or, apparently, to its own Trustee Board" 9/

"We shall not comment here on the process by which Prof Hutton was removed from the USS Board, except to say that it clearly did not follow the course of natural justice" 10/

"Far from being an accidental oversight, we believe that the lack of protection for whistleblowers [in relation to TPR] represents a structural disregard for figures who act in the interests of scheme members" 11/

"Sponsoring employers are less likely to need whistleblowers". And "employers have appointed, & enjoy a close relationship w, a larger number of Trustee Board members, including the Chair" Info that has been shared btw USS, employers, TPR has been denied to UCU & Prof Hutton 12/

Concluding comments:
UK doesn't have a regulatory framework that protects the interests of members in open DB pension schemes.

Kingman review of the Financial Reporting Council noted overall lack of oversight of actuarial profession 13/

Lord Paul Myners has noted Regulator’s tendency to encourage overly conservative discount rates & investment plans, usually at members’ expense https://www.theactuary.com/features/2019/02/interview-challenging-convention/ 14/

"Pending the Government reforms of actuarial regulation recommended by the Kingman Review, this Select Committee must act now to ensure proper oversight of #USS" 15/

" #USS is the largest DB scheme in the UK, it is of immense strategic importance to the HE sector and the wider economy, and its members deserve a Trustee Board and a Regulator that will listen to their representatives’ concerns" #UCUstrike #USSstrike 16/16

PS USSbriefs has, independently, sent a copy of #USSbriefs83 to the Work & Pensions Committee #USS #USSstrike #UCUstrike https://medium.com/ussbriefs/the-insider-jane-hutton-and-uss-d350ba5457ae