The information so far provided to members concerning the actuarial valuation is limited and is wholly insufficient for Academics for Pensions Justice to form its own view of the valuation (in conjunction, as the case may be, with its expert advisers) in particular such matters as the evidential basis for the assumptions and used in its preparation, including, by way of example only, the financial assumptions, the strength of the employers’ covenant; the fund deficit; the discount rate applied and the mortality rate.Click To TweetLast week our solicitors, Gordon Dadds, wrote to Professor Sir David Eastwood, chairman of the USS trustees. The letter gave Universities Superannuation Scheme Ltd (USSL) 10 days to produce the full actuarial valuation and other associated reports that have not been shared with members of the scheme. The letter was copied to Frank Field MP, Parliamentary Under-Secretary of State for Pensions, Guy Opperman MP, and the Financial Reporting Council.
One of the ongoing issues in the pensions dispute is that USSL have refused to share this data with members of the fund, both directly, or via the Universities and College Union (UCU() representatives on the Joint Negotiating Council. Given the significant implications of the 2017 valuation – that the fund is in deficit large enough to justify a move from Defined Benefits (DB) to Defined Contributions (DC) – our letter states that:
“The information so far provided to members concerning the actuarial valuation is limited and is wholly insufficient for Academics for Pensions Justice to form its own view of the valuation (in conjunction, as the case may be, with its expert advisers) in particular such matters as the evidential basis for the assumptions and used in its preparation, including, by way of example only, the financial assumptions, the strength of the employers’ covenant; the fund deficit; the discount rate applied and the mortality rate.”
Given our expertise and ability to call on expert advisers if appropriate, the level of information provided so far by USSL has been inadequate at best.
The legal basis for our request is to be found in the Technical Actuarial Standards (TAS) imposed by the Financial Reporting Council. The TAS provides that organisations such as USSL are subject to the Reliability objective:
Users for whom actuarial information is created should be able to place a high degree of reliance on that information’s relevance, transparency of assumptions, completeness and comprehensibility, including the communication of any uncertainty inherent in the information.
Transparency and completeness of information is particularly important. We have asked USSL to fulfil its obligation to provide transparent and complete information to APJ as users of the information. The definition of “user” in the TAS is in several parts:
those people whose decisions a communication is intended (at the time it is provided) to assist
In many cases the use of and reliance on actuarial information are not confined to those paying for its preparation. We consider that all the intended users, regardless of their commercial relationship with those responsible for preparing the report, should be able to rely on the information.
The definition of “users” deliberately refers to those who are intended to be assisted by the actuarial information. Those who may have access to the information are not necessarily users. For example some reports are addressed to and intended for a limited group of people, such as pension scheme trustees, but are available to (but not addressed to) a wider group of stakeholders, such as scheme members. It is only those for whom the report is specifically intended who are users of the information it contains.
Users are not only those who have paid for the actuarial work. The definition includes anyone, in any relationship with USSL, who is intended to be assisted by the information. Since members of the fund are being expected to make decisions about their continued involvement in the pension fund and a change to contributions, we argue that they are intended to be assisted by the valuation and are therefore users who are entitled to have the actuarial report in full, not merely in the form of explanatory reports from USSL.
We are currently awaiting a response from Professor Sir David Eastwood. We will update you in the event of a response or any decision to take further action.
Sam Marsh from Sheffield UCU has created a petition on this issue which has already been delivered to USSL and has also gone to Frank Field MP, who has urged USSL to act transparently and release the data we are asking for. We hope that our letter will convince USSL of their obligation to release the data and that it will be forthcoming.
Please consider signing Sam Marsh’s petition: you.38degrees.org.uk/petitions/uss-must-show-its-workings