The Universities Superannuation Scheme (USS) today publish their annual report at 31 March 2016. The scheme, alongside many other defined benefit schemes throughout the UK, continues to deal with challenging funding issues caused by falling gilt yields, the decline of long-term interest rates and continued market volatility. USS’s positive asset returns above anticipated benchmarks are welcomed given the increase in the estimated value of the scheme’s liabilities at 31 March 2016.
The Employers Pensions Forum* acknowledge the challenging funding position and the latest reported deficit of £10 billion. The Forum maintains regular contact with USS on risk and funding issues and will continue to do so as we look ahead to the next valuation at 31 March 2017.
Professor Koen Lamberts, Chair of the Employers Pensions Forum, said:
“Employers acknowledge that the range of challenges facing the scheme are not exclusive to USS and impact on many defined benefit schemes in the UK. Employers are committed to the long-term sustainability of USS, as can be demonstrated by the introduction of the new hybrid scheme in April 2016 alongside increases in both employer and scheme member contributions.
“Work in anticipation of the 2017 valuation has already commenced, which includes a scheme review of the employer covenant. This work will continue as the scheme approaches March 2017 with employers keen to fully understand the likely issues facing the scheme at that point”.
*The Employers Pensions Forum was established by GuildHE, the Universities and Colleges Employers Association (UCEA) and Universities UK (UUK) in 2007 as a broad based forum for institutions to discuss current and longer term pensions issues and to develop a strategy that will enable the HE sector to continue to offer staff access to high quality pensions schemes as an important part of the total remuneration package. Membership of the Forum consists of representatives drawn from Vice-Chancellors, Finance Directors, HR Directors, and Registrars, all with considerable experience in this area.