Index of my tweet threads

On USS and related topics of pensions, inflation, and pay (plus other threads related to UK higher education)

Below are links to my Twitter threads (plus the occasional solo tweet) on the above topics, from June 2018 to the present. (See also my blog posts on USS, which are not indexed below.) I will update these links regularly.


February 16

A new blog entitled “Does USS’s valuation implement JEP in full?: Yes, with one exception which it’s hard to fault them for rejecting”.

February 12

If they investigate the details, it will become manifestly clear to the #USS trustee that their executives have failed to provide an adequate response to the critique of “large and demonstrable mistake” over Test 1 arising from @Sam_Marsh101’s asset projections.

An intriguing piece on how local authorities are replacing the austerity-driven 60% cuts in central govt grants since 2010 with unlimited low interest (gilt yield) loans from the central govt.

February 11

I hope @USSEmployers & scheme members take a few moments to read this interview👇w/ Paul Myners in @TheActuaryMag, whose URL appropriately includes the words “interview-challenging-convention”.

February 10

The current @ucu ballot for NEC members, Vice President & other officers is very important. It will determine the balance of power of a divided union & the direction it takes over a number of issues. I’ll focus on one issue in tweets below.

February 8

A new blog👇entitled ‘USS must be planning for the possibility of DB scheme closure in 20 rather than 40 years’.

February 7

#USS’s impending decision regarding automatic triggers will be a test of the sincerity of the hopes they had earlier repeatedly expressed that it will be possible to avert large contribution rises in October 2019. See their initial 13 Sept response to the JEP report👇.

February 4

If USS executives attempt to trigger an automatic rise in contributions in the event of a specified increase in ‘reliance’ (aka the ‘self-sufficiency deficit’) during the next three years, the trustee board must intervene and stop them.

Does anyone know the discount rate & equity/bond ratio of the CPP fund? And are US Social Security contributions set based on a discount rate (like, e.g., UK PAYG public sector schemes, discounted at expected long term growth in economy)?

February 1

#USS’s decision 👇to lower deficit recovery contributions (DRCs) from 6% to 5% in the just-completed 2017 valuation sets a useful precedent which will place pressure on them to lower the upper bookend 5% DRCs for the 2018 valuation.

January 31

In a thread started by @USSbriefs, @ucu-appointed JNC negotiator @Sam_Marsh101 says this [but outrage over USS’s valuation in response to JEP should be tempered by a key passage in the JEP report] And see also my reply to Sam Marsh’s response.

January 27

Here I boil down a number of previous tweet threads into an 8 point blog post called ‘The difficulty in achieving a No Detriment valuation that incorporates JEP in full’.

January 25

Why I disagree w/ @ucu-appointed JNC member @Sam_Marsh101’s view 👇 that “It’s unforgiveable that USS are not attempting to implement [in full] what JEP advised.”

January 24

Those of us who have been arguing that #USS’s liabilities should be discounted based on expected returns of a portfolio weighted towards return-seeking assets should take a few minutes to read this, for how such an approach can go badly wrong.

The latest communication on #USS from @ucu headquarters provides an informative & realistic account of where things now stand, the union’s stance, & how it is pressing for, & the obstacles to, its realisation.

#USS is much more analogous to LGPS than to the typical closed DB scheme that tPR regulates. USS should forego its nearly worthless PPF protection in exchange for a right to be funded & regulated along lines of LGPS.

January 21

This is a rare case where I side w/ John rather than @kevinwesbroom & @markjrowlinson. Conventional age-insensitive DB accrual made sense when final salary was the norm but has been thrown out of kilter by recent intro of CARE DB. (Plus various other tweets scattered through the thread, including this one: Simple solution is age-insensitive CARE with 1/x accrual of active members revalued somewhat below the best estimate long term returns on which the target pension is based. Somewhat below to take account of the fact that younger members are expected to live longer.)

January 15

.@Aon’s advice to employers has just been released. @kevinwesbroom is one of the authors. [Aon is UUK’s actuary.]

January 12

How could employers implement JEP in full, including no automatic triggers for this valuation, in order to achieve No Detriment? Necessary condition is removal of their current trustees & replacement w those whom they think will vote for such full implementation.

Each day leading up to the launch of #USS’s new valuation, I re-tweeted the following question: WHAT ARE YOUR GROUNDS FOR REFUSING TO ALLOW THE SCHEME TO RUN A SUBSTANTIAL SURPLUS? See embedded thread for context.

January 8

In their new valuation #USS continues to make a “large and demonstrable mistake” in applying Test 1, which they now ineptly try to explain away by contradicting past statements (see embedded thread).

January 5

#USS provides blinkered, inaccurate, exaggerated measures of risk in their consultation document, all three of which are tied to the gilt yield. More comments below.

Thoughts on how difficult it will be for @ucu & @UniversitiesUK to reach an acceptable settlement under #USS’s latest valuation.

January 4

#USS contradicts itself in its latest attempt to answer the critique arising from @Sam_Marsh101’s findings regarding expected asset level 20 years hence. See the following highlighted passage from p. 12 of the consultation document on the 2018 valuation:

#USS has released their consultation on the 2018 valuation. Headline figure is that the best case scenario they’re offering to members is a 3.7% increase in contributions to preserve the DB & DC status quo (minus the 1% match).

Grayling blames RPI increase in wages of rail workers for the rise in fares by RPI:

January 3

.@UniversitiesUK employers have overwhelmingly agreed to JEP modelled +2.1% rise in employer contributions (along w/ +1.1% member) to preserve DB & DC status quo (minus the 1% match), so long as USS & tPR agree and this is not tied to unreasonable automatic triggers.

January 1

Re this tweet by @Kiffmeister asking why “the hoped-for return on assets held by the scheme should be used to discount the scheme’s liabilities”.


December 30

Even with CPI + 1.5% revaluation, that’s still less than the SCAPE discount rate. Hence, younger members are overpaying. It is only with the recent shift to CARE that younger members overpaying in a DB scheme has become a significant problem.

Question to @JohnRalfe1 in mid-July

December 26

Here Woon illustrates the fundamental flaw in @JohnRalfe1’s approach to the valuation of a DB pension scheme:

December 23

Lack of justification for 20 yr shift of portfolio to bonds (dignified w/ label ‘de-risking) provides the strongest case for breach of duties to act in interests of beneficiaries, IMHO.

December 21

USS employer contributions for pre-92 expected to rise by at least 2%. TPS employer contributions for post-92 by 6–7%. Augar expected to recommend cut in tuition fees from £9k to c. £7k.

.@FirstActuarial’s advisors for @ucu @RedActuary & @Derek_Benstead would sign off on all JEP recommendations as prudent if they were scheme actuaries for #USS:

December 20

The fundamental problem w/ the #USS valuation is that they have two funding targets, & their unjustified choice to meet the one target precisely renders it prohibitively expensive to meet the second target as well. More details in tweets below.

December 18

@USSEmployers has just posted the linked letter from Bill Galvin to @AlistairJarvis, rejecting a @UniversitiesUK call for a lowering of deficit recovery contributions from 6% to 2.1% for the 2017 valuation.

Here is @ucu’s latest statement to members on #USS

December 17

ONS report on student loans is released (and see also responses to Q for @amcgettigan & @TorstenBell: Would abolishing tuition fees & replacing w direct govt spending on universities that results in their receiving the same amount as now really increase deficit by only £4 bn over the current loan system under the new accounting rules?)

December 15

Here I’m starting a separate thread which discusses the leaked Xafinity @TrinCollCam’s assessment of #USS and the risks of DB for the sector as a whole, rather than @TrinCollCam in particular.

December 14

A new letter from the Pensions Regulator on #USS [with my comments in tweets below]:

December 12

#USS Chief Risk Officer @GuyCoughlan recently emailed me a further response to my blogs on the implications of @Sam_Marsh101’s findings regarding asset projections and Test 1. I link to, & comment on, Guy’s latest response in this blog I’ve just posted

December 11

#USS reveals that over 1,300 of the 4,333 individual responses (>30%) to the #USS consultation on Rule 76 contribution increases made use of @USSbriefs’s ‘resile and resubmit’ template!

December 8

Trinity College, Cambridge (@TrinCollCam) plans exit from #USS. A few thoughts below.

December 1

Bill Galvin’s latest linked @Wonkhe piece indicates no shift of position from 22 Nov #USS statements. Disappointingly, the passage below repeats his commitment to the imposition of automatic triggers.

November 30

Very sensible for @TPRgovuk to regulate Beefeater DB pensions out of existence. The Tower of London they guard was founded only as recently as 1066 & has been a popular tourist attraction only since Elizabethan times. Could go bust at any moment.

November 27

Re JEP proposals, #USS 22 Nov statement says they will “[a] consider the scale of the additional financial risks involved, and [b] the ways and means by which employers are willing and able to fund the risks that the Trustee could contemplate taking.”

November 25

A hypothesis re @UniversitiesUK’s push to 100% DC: UUK realised that the Tory 50% turnout threshold to authorise strikes would be repealed as soon as Labour returns to power, which might well be by the next triennial valuation.

For what sort of pension scheme would a fall in the gilt yield during the next few months be such a problem that the trustee and tPR should legally bind employers now to raise contributions before the next valuation in the event of such a fall?

November 24

I was surprised by the claim that TUITION FEES SUBSIDISE RESEARCH, attributed to @UofGVC Anton Muscatelli in today’s linked Telegraph article regarding a possible cut in Home/EU tuition fees from £9,250 to £6,500

Thanks, @USSbriefs, for drawing this to our attention. It’s disappointing that it takes someone’s (not my, incidentally) anonymous submission to @AcFreedomWatch to get LSE’s (@LSEnews) submission to the JEP consultation into the public domain.

This piece by Gregor Gall is over a year old. But it provides a useful account of how, despite such a large group of workers spread throughout the country, the CWU was able to achieve a huge 74% turnout, 89% of whom voted in favour of industrial action

November 23

This @ucu resolution, which their NEC passed today, is described as “unifying”.

In his linked blog post on the new valuation, #USS CEO Bill Galvin offers the following accurate account of @ucu’s actuary @FirstActuarial’s approach to the valuation of the DB scheme [Link to more readable Thread Reader version.]

November 22

#USS’s obsession with short term risk and reliance, plus legally enforceable triggers, can be fairly directly traced to tPR’s linked 2017 DB annual funding statement, which was released in May 2017. [Link to more readable Thread Reader version.]

#USS’s statement confirming that they will be conducting a new valuation as at 31 March 2018 [Link to more readable Thread Reader version.]

November 21

Thanks to @Sam_Marsh101 for alerting me that @ucu has just released a paper from @FirstActuarial which assesses his critique of #USS over Test 1 arising from his modelling of the valuation, and which I have pressed and developed in my blog posts

November 17

I would also welcome LSE’s (@LSEnews) public posting of their submission. Our management has posted to an internal website, without alerting staff. @LSE_UCU has circulated a link & summary to members, but we lack permission to make this public.

November 14

Those MP’s who studied PPE are among the most in favour of remaining in the EU. Those who studied Philosophy, but not combined w/ other subjects, are among the most in favour of Brexit (Leave). Not sure what lessons to draw.

November 9

Right. Even if this consultation all goes smoothly for Royal Mail & CWU, it would still be a while before this will become possible for a multi-employer scheme such as USS. DWP appears, however, to be fairly receptive to eventual extension to multi-employer schemes:

This is good news that “it is clear that there is support from most employers for the JEP’s recommendations, subject to further details about risk and a favourable response from the USS Trustee and The Pensions Regulator”.

November 8

Re the @ucu Manchester conference, the afternoon session on #USS was inquorate, and hence any of the linked motions that passed were advisory rather than becoming official union policy. [Link to more readable Thread Reader version.]

November 7

Oxbridge notorious among the abusers. E.g., Praefectus of Holywell Manor was a post that Balliol Fellows cycled into during their 3 years prior to retirement in order to receive a boost to their FS pension.

November 6

Alternatively, it, and WinRS, as well as career average rather than final salary, are much less costly means of managing employer risk than USS’s proposed shift into bonds. CDC has the strong backing of TUC and First Actuarial (link) for that reason.

As I mention in this linked thread, @ucu’s policy regarding #USS will be determined in a conference in Manchester tomorrow. There I comment on a number of motions. Below, I detail my reservations over Motion 5 in particular.

November 5

Alerting #USS members: today, tomorrow, & Wed are important days, since @ucu’s position re #USS & JEP proposals will be set by the end of special sector conference Wed afternoon. By noon today, we should learn what motions have made it onto the agenda (see highlighted):

November 4

Some comments on @UniversityLeeds’s recently released #USS documents (tagging @leedsucu & @zenscara). First, here is a link to @USSbriefs’s posting on Leeds’s submission to the JEP consultation.

I now believe that, if #USS releases comparable data regarding the 2014 valuation, it will reveal a similar mismatch between Test 1 assets & liabilities to the one that @Sam_Marsh101 has uncovered w/r/to the 2017 valuation.

November 3

In their linked submission on the JEP report, Imperial College makes a strong call for greater transparency from #USS. “This issue must be addressed as a priority.”

November 1

.@Sam_Marsh101 #USS has now released cashflow projections (see link). Now that they have made these public, would it be possible for you to release a version of your spreadsheet that includes these? [Link to updated spreadsheet.]

October 31

A good, informative update from Matt Waddup of @ucu on #USS. I especially welcome point 6 regarding ongoing discussion with actuaries and employers regarding problems with Test 1 that have come to light.

𝗨𝗦𝗦 𝗽𝗿𝗼𝗽𝗼𝘀𝗲𝘀 𝟯𝟭 𝗠𝗮𝗿𝗰𝗵 𝟮𝟬𝟭𝟴 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝘁𝗼 𝘀𝘂𝗽𝗲𝗿𝘀𝗲𝗱𝗲 𝟮𝟬𝟭𝟳 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗥𝘂𝗹𝗲 𝟳𝟲 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲𝘀 𝗳𝗿𝗼𝗺 𝗢𝗰𝘁𝗼𝗯𝗲𝗿 (as announced to employers in letter dated 23 October).

October 30

While exhausting and time-consuming, for me it’s an extension of, rather than a distraction from, my academic work. It’s grounded in one of the central ideas of John Rawls: justice as fairness as…

𝗪𝗵𝘆, 𝗶𝗻 𝗹𝗶𝗴𝗵𝘁 𝗼𝗳 𝘁𝗵𝗲𝗶𝗿 𝗵𝘂𝗴𝗲 𝗧𝗲𝘀𝘁 𝟭 𝗺𝗶𝘀𝘀𝘁𝗲𝗽, #𝗨𝗦𝗦 𝗺𝘂𝘀𝘁 𝘀𝘂𝘀𝗽𝗲𝗻𝗱 𝘁𝗵𝗲 𝗰𝗼𝗻𝘀𝘂𝗹𝘁𝗮𝘁𝗶𝗼𝗻 𝗼𝗻 𝟭𝟬.𝟰% 𝗰𝗼𝗻𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲𝘀. Here is JEP report’s useful diagram of USS’s Test 1 Rube Goldberg device:

October 29

This comes as another pleasant and surreal surprise! I’m one of three finalists for the linked @Wonkhe “Wonk of the Year” award, for my blogs on #USS. I love the connection they draw to the discipline of philosophy.

October 28

Further confirmation [via reference to USS’s own video explanation of Test 1] of #USS’s “large and demonstrable mistake” regarding Test 1. See this chart prepared by @Sam_Marsh101 for Sheffield’s USS Working Group. The important figures are in row 1.

October 27

A new blog post, in which I respond to a query by @kevinwesbroom regarding @Sam_Marsh101’s and my critique of USS on Test 1 which arises from Sam’s findings.

October 22

The discount rate for the pay-as-you-go Teachers Pension Scheme tracks OBR long term forecast of the growth of the economy (as proxy for tax revenue). With the impending folly of Brexit, these forecasts are justifiably lower than they would otherwise be.

See screenshot of Robin Ellison’s linked critique of #USS’s & @TPRgovuk’s”self-sufficiency” approach, which “measure(s) liabilities by reference to the value of government securities”.

Do you realise, @JohnRalfe1, that #USS already employs the “expected return on assets” approach to setting the discount rate? In this regard, JEP is not recommending something that USS doesn’t already employ.

October 21

“𝗡𝗘𝗪 𝗠𝗔𝗧𝗘𝗥𝗜𝗔𝗟 𝗘𝗩𝗜𝗗𝗘𝗡𝗖𝗘”: Remember this statement from #USS to FT pensions correspondent @JosephineCumbo?:

October 20

And I’ve already demonstrated how confused John [Ralfe]’s own answers to his own two questions are:

October 18

I like these comments by @dsquareddigest on the “@Sam_Marsh101 critique”. Daniel is an equity analyst in the City who blogs for Crooked Timber in his spare time….

Brilliant! (Downfall video caption thread.)

I’ve just posted the following further defence of the critique arising from @Sam_Marsh101’s findings, in response to #USS’s latest (16 Oct) attempt to answer this critique. 𝗣𝗟𝗘𝗔𝗦𝗘 𝗥𝗘-𝗧𝗪𝗘𝗘𝗧 𝗪𝗜𝗗𝗘𝗟𝗬!

Please read & re-tweet this embedded thread from UCU-appointed JNC negotiator @Sam_Marsh101. I once had a lot of respect for the professionalism of #USS executives & the quality of their work.

October 17

FT pensions correspondent @JosephineCumbo’s reporting of harsh criticisms of #USS, which have them reeling, now features as the most recent piece in the “USS latest” section of @ucu’s website!

Superb analysis by @USSbriefs of how #USS’s failure to provide timely answers to questions by @Sam_Marsh101 & his Sheffield employer “raise profound questions about Scheme governance and about UUK consultations.”

October 13

As promised, a new blog post: “USS’s valuation rests on a large and demonstrable mistake: when corrected there is no deficit as at 31 March 2018 and no need for detrimental changes to benefits or contributions”. 𝗣𝗹𝗲𝗮𝘀𝗲 𝗿𝗲-𝘁𝘄𝗲𝗲𝘁. (It has been retweeted over 850 times.)

.@Sam_Marsh101 I’m now writing up a blog on the significance of USS’s confirmation of your analysis. A fact-checking question: Has USS confirmed the accuracy of your column 2, row 1 yr 20 TP liabilities figure?:

October 12

I think @Sam_Marsh101 would agree with me that the fault lies with #USS & not at all w/ the Joint Expert Panel.

#USS has confirmed @Sam_Marsh101’s analysis that, on a proper understanding of Test 1 — in fact, #USS’s own understanding — no de-risking of the DB portfolio is called for!

Would the @UniversitiesUK & @ucu trustees (e.g. @UofGVC & @Daveguppy) who jointly govern #USS (controlling majority) urgently instruct #USS executive (e.g., @GuyCoughlan) to respond to JNC member @Sam_Marsh101’s request? (Two hours later, USS emailed Sam a response to his request.)

October 10

I’m sure that #USS has done the calculations, and they’ve also made a calculation that it would not put their current valuation in a good light to release them. So we can infer that @Sam_Marsh101’s calculations are either broadly correct or understate asset growth.

October 6

.@UCL_UCU has responded on Twitter to my linked blog post “Questions for advocates of No Detriment”. Below I expose two problems with their response. (Link to more readable Thread Reader version.)

October 5

He doesn’t mention USS, but it provides a perfect example of the need for universities to collaborate rather than try to cut down to size through competition. Remember this infamous passage from @Cambridge_Uni’s submission to the Sept consultation?:

I have a more positive take on the USS statement:

October 3

A query for @UCL_UCU regarding their tweet below: If employers call for a cut to DB accrual from 1/75 to 1/80 in order to keep employer contributions down to 19.3% on a 65%/35% employer/member cost-sharing basis, would that also be consistent, in you view, with acceptance of the JEP recommendations in full?

In general, I think @Sam_Marsh101’s presentation is really impressive. Two small quibbles.

It has been over a month since @Sam_Marsh101 submitted his Addendum to the JEP and #USS. If he’s right, the current valuation contains a significant, hidden layer of prudence ABOVE AND BEYOND the following that JEP lists here:

October 2

According to @AlistairJarvis’s @UniversitiesUK’s initial (linked) response to the JEP report, any solution for #USS is likely to require “some moderate adjustment to benefits” among other changes.

September 30

Regarding the force of the case for protecting DB below the salary threshold over DC above the threshold, I don’t even mention indications that there will be another big hit on pension tax relief at the autumn budget.

September 29

.@Cambridge_Uni’s response to a 2016 consultation re strength of the #USS covenant has recently been released via FOI. Cambridge disputes PWC’s finding of a strong covenant over 30 as opposed to merely 20 years! The following statement in their response is a bombshell:

September 24

.@UniversitiesUK has just published the consultation document on the JEP report that they’ve sent to employers. (Link.) Some ‘live-tweeting’ of my reactions as I read this document in real time. (Link to more readable Thread Reader version.)

September 19

Please read this thread (esp my 17-tweet string farther down) on how @ucu pushing for employers to absorb all 3.2% of JEP contribution increases would simply give employers cover to argue that cutting DB from 1/75 to 1/80th is also consistent w/ JEP:

September 18

A blog in which I argue for the importance of acceptance in full by union and employer of the proposals of the Joint Expert Panel on #USS. Further remarks below on the graphed 65%-35% employer member split of contribution increases.

Raised eyebrows over UCL Provost’s email re stock market & #USS deficit. In addition to @Will_McDowall see tweets by @vdiazucl @felicitycallard @UCL_UCU @USSbriefs. Thoughts below.

September 16

.@carlomorelliUCU, who is an elected JNC negotiator for @ucu, is circulating the linked open letter calling “for the employers organisation UUK to pay the full 3.2% of additional contributions proposed by the JEP [Joint Expert Panel]”.

#23 of 50 on this list comes as a pleasant surprise.

September 15

A new blog post, which elaborates on the significance @Sam_Marsh101’s JEP Addendum, while noting that his findings were too late to be incorporated into their report.

A branch of the union, @UCL_UCU, has retweeted this claim of one of their members, that employers were ‘basically stealing’ when they reduced their contributions to 14% from 1997 to 2009.

September 13

My live-tweeting of my reactions to the 112 page USS Joint Expert Panel report as I read the report. (Link to more readable Thread Reader version.)

September 11

USS CEO Bill Galvin’s old job as CEO of tPR is being advertised, with a salary of £222,500.

September 10

Given that @ucu is happy to take stances on political issues (e.g., condemnation of IHRA definition of anti-semitism), it’s regrettable that the union refrained from taking a stance on Brexit, despite the fact that c. 90% of members opposed Brexit.

September 9

This linked #USS document that was posted about four days ago reveals that the dramatic reduction in the FRS 102 deficit from £17.5 bn in 2017 to £8.4 bn in 2018 was almost entirely down to two things:

September 6

.@ProfJohnKay & Mervin King have written this wonderful critique of DB regulation in the UK:

September 5

Calling all #USS members: Please read this, weep, and then retweet. “Why can’t USS provide us with a DB pension as good as SAUL’s?”

Re this call for increased transparency & openness in @livuninews Dame Janet Beer in her linked @UniversitiesUK speech….

September 4

This piece in @Wonkhe calls for post-qualification uni admission (PQA). It links to a @ucu study that maintains that “PQA is the global norm : England, Wales & Northern Ireland are real outliers”. The study appears to have a big flaw.

September 3

Consultation on #USS contribution increases opens today. Their website is now live (link). Some differences, on which I comment below, between what’s on the website & what’s in the hard copy consultation document that we’ve received in the post. (Link to more readable Thread Reader version.)

September 2

Link to @Sam_Marsh101’s well-documented, sound & explosive addendum to his JEP submission, which reveals a serious failure on the part of #USS to apply Test 1 properly, in a manner that makes sense of its underlying rationale (Link to more readable Thread Reader version.)

August 30

A thread on Test 1 and the significance of the level of assets in the scheme versus the technical provisions discount rate at year 20. Most of the useful information in the thread is contained in this long exchange with Sam Marsh in this subthread.

August 27

𝗔 𝗗𝗜𝗟𝗘𝗠𝗠𝗔 𝗙𝗢𝗥 #𝗨𝗦𝗦, in tweets below, which arises from my posts on the recent history of the scheme (see embedded blog)

Two tweet threads in defence of the high level and low cost of public sector pensions: (1) First thread in response to Alan Higham; (2) Second thread in response to John Ralfe (you will need to read both upward and downward from this tweet).

August 26

A problem with @JohnRalfe1’s JEP submission: 4.5 is non sequitur. It doesn’t follow from 4.4:

A problem with a ‘tontine’ longevity credit proposal

August 25

Here I distill my threads of the past few days into a single message: the @FirstActuarial & @ucu approach to the investment and valuation of #USS is not some radical new theory. Rather, it’s in line with the way #USS used to run things, before Bill Galvin took over as CEO.

August 24

Cost-sharing consultation document sheds light on role JEP might play. See this passage. Comments below.

Click here for scans of #USS’s cost-sharing consultation document. In comments below, I mention a couple things that surprised me.

Here is @ucu’s headline statement in their strike leaflet (linked): “Since 2009, the cumulative loss to your pay (compared to rises in RPI) is 21.0%.” (This is a continuation of a thread from 15 August.)

August 23

A Joint Review Group (JRG) of employer and union representatives was set up in 2008. Back then #USS offered “its full support to the group, in terms of PROVISION OF DATA [my emphasis] and scheme information, as it makes its deliberations.”

August 22

As this graph shows, #USS has already engaged in extensive ‘de-risking’ of its portfolio from equity into bonds during the past 10 years. Calls from @FirstActuarial and @ucu for a cancellation of plans for further de-risking should be assessed in this context.

August 20

If @Sam_Marsh101’s explanation is right, turns out #USS’s Sept valuation already built in prudence w/r/to assumed +1.5% gilt yield reversion, so Nov speeding up of de-risking to yr 1 was overkill

August 19

The regs in force during 14% ‘contribution holiday’ made it possible for #USS to run the scheme in the manner that @FirstActuarial & @ucu now recommend. That’s what they did! More below on @USSbriefs JEP submission by @deepa_driver

August 18

W/ @deepa_driver’s JEP submission, it appears to me, on closer inspection, that @USSbriefs has gone back in time & devoured the children of their own, i.e., @FirstActuarial’s & @Dennis_Leech’s, recommended approach to the #USS valuation!

August 17

A reason why @Sam_Marsh101 may be right re significance of @deepa_driver’s @USSbriefs: a few months ago, #USS removed valuations pre-2011 from their website. They were asked to restore them, but they didn’t. Why did they remove them and not restore them?

Re this passage from the linked @USSbriefs manifesto … Please click here and then scroll down for my review and assessment of the @UniversitiesUK’s ‘wide range of evidence sources’

Generally excellent submission to Joint Expert Panel by Richard Farndale and @CambridgeUCU. Some comments below.

August 16

.@PJTheEconomist just made a compelling case on the Today Programme for the use of RPI as the interest rate on student loans.

August 15

Are there any good defences of the use of RPI unstripped of the Carli formula (i.e., RPI rather than RPIJ) as a sound measure of inflation?

Below are updated graphs I’ve made, which show how much salaries of university employees have fallen in real terms, by different measures of inflation, during the last 20 years. (See also this Facebook post, which contains links to earlier posts on inflation and the pay negotiations.)

August 13

Brexit and @UCU: the union will “consult with members on whether UCU should support a second referendum on any final Brexit deal negotiated by the UK government”.

A graph of #USS employer & member contributions, as % of salary. Starts with 1975 foundation of scheme. Ends with ‘cost-sharing’ increases for 2019–2020, on which consultation opens in early Sept.

Rise in rail fare linked to a flawed RPI measure of inflation that is in its death throes

August 12

As Keynes said: “When I find new information I change my mind; What do you do?” Labour voters share this sensible approach. Unfortunately, the leader of their party doesn’t.

For a clear explanation of the manner in which the Financial Economics (FE) approach to DB funding involves a conceptual confusion and conflation of two very different types of valuation, click here

August 10

Questions to USS regarding the influence the JEP September report could possibly have on the 2017 valuation

August 9

An important statement from a USS trustee! (regarding employer risk attitude — a short thread to which I might add)

ATTENTION MUST BE PAID to a tension between statements to FT’s @JosephineCumbo from (1) #USS and (2) @TPRgovuk

August 8

Some highly significant #USS news from @JosephineCumbo re @TPRgovuk: She has elicited a clarifying statement from them which “tells us that USS’s actions a fortnight ago enabled it to avoid a contribution plan being imposed on it by the Regulator.”

Some thoughts below on this interesting @USSbriefs thread which ends with this tweet: ‘But alarmist in our interpretation of UUK’s allusion to those possible legal options that may cause the breakup of #USS? We don’t think so. ’

August 7

Query to the @FT re 1st sentence of linked piece on #USS by @KateBeioley_FT (cc @JosephineCumbo). Sentence reads: “Members of the UK’s largest pension scheme will need to increase their contributions by nearly 4% points to help plug its £8.4bn accounting deficit, unless they can come to an agreement with their employers, the Universities Superannuation Scheme warned on Wednesday.”

August 6

Workshop tomorrow at @Cambridge_Uni on “Social Media and #USSStrikes”, organised by members of @CambridgeUCU. This reminds me of a couple controversial claims by Cambridge VC Toope. (This is the one in which Alistair Jarvis makes a cameo appearance and then I go on to analyse a video of Cambridge VC Stephen Toope)

Without planning to do so, I’ve been making running commentaries on @UCU branch statements regarding cost sharing. Here, in one place, are links to my threads

August 3

A useful reminder of how different DB was when #USS was founded 40 years ago — in fact how much it resembled the WinRS design @FirstActuarial first proposed for Royal Mail. It was a sensible and sustainable way to run a DB pension scheme. (I won’t mention the author just yet.)

August 2

Of all the many objections to #CDC flying around the Twitter, this one is surely the best: ‘CDC would be an abomination for USS, the unions would throw their toys out of the pram at the first sign of a haircut’

July 31

Hi Max. Should how much money people have for their retirement depend on how lucky they’ve been in playing the stock market and how long they live? Or should we share one another’s risks, so that each has a decent pension, no matter how lucky or long-lived? #AskMaxCumbo

One of an occasional series of tweets on something other than USS. (On why it would not be undemocratic for an opposition party to campaign on a manifesto to keep the UK in the EU if elected or to hold a second referendum that includes an option to remain in the EU.)

July 27

This embedded tweet from @IlliniBizDean is illuminating. I comment in tweets below: ‘ One can also recognize that the right discount rate gives the right answer on funding, and still conclude that “full funding” is not necessary. Society can choose to fund partly on a pay-as-you-go basis. But we should be honest about size of costs we are shifting forward.’

Would anyone dispute the following re USS? There are only 2 ways to prevent the rise in contributions by 10.6% by April 2020: 1. Changing existing DB benefits and/or 2. Increasing the assumed returns in investment in the valuation

July 25

…there is a blog from Bill Galvin (linked) that was posted today which appears to have gone unnoticed. (Discussion of Galvin’s statement that USS will review “the early discussions regarding [employer] risk appetite and capacity.”)

The fears about CDC expressed in this embedded tweet by @DrJoGrady … strike me as unfounded, for reasons I mention in tweets below.

July 24

Exchange mainly with Ed Bartholomew regarding First Actuarial’s approach (also scroll up as well as down and into threads that fork off)

July 18

Having previously assessed two bad arguments (see links) that USS is not in deficit, I now go on to offer a much better argument that it is not in deficit: ‘(Good) Argument #3: USS lacks sound basis for de-risking the assets over the next 20 years. Once this de-risking is cancelled, the scheme is fully funded on a prudent basis.’ (Since links to assessments of two bad arguments are embedded in this thread, I don’t link to them in this index. See this blog post, which incorporates these tweet threads and adds a bit of commentary.)

July 14

A tweet thread on how USS monitors the funding level of the scheme between valuations. (See also embedded links to subthreads, including the LONG one.)

June 23

Every #USS member should read @FixingEconomics’s “Reckless Prudence: How to break a pension system” (link). Some quotes and comments in the thread below.

June 20

I’ve finally had a chance to read ‘Risk Is Not a Four-Letter Word’ by Hilary Salt — aka @RedActuary. I highly recommend it to academics in USS.

June 9

.@leedsucu writes: “…To take home pay in 2018–19 with the same real-terms value as in 2008, our pay would need to increase by 7.8%.” (Tweet thread on Leeds UCU statement about the pay ballot and inflation.)