Call for submissions – Joint Expert Panel

The JEP has recently started its second phase of work on the USS valuation. The second phase has two parts, the first of which is concerned with the valuation process and governance.

The second part of the Panel’s work which, will start later in the year, will consider how the long-term sustainability of the Scheme can be secured through the development of a shared set of principles and will revisit the valuation of technical provisions and other aspects of the valuation methodology, including Test 1.

We would ask stakeholders to hold back any comments on this wider matter until later in the year.

The first part of the JEP’s work includes consideration of:

• The roles and involvement of UCU and UUK in the valuation process so that a more collaborative approach could be adopted.
• An examination of the interaction of the various bodies with a formal role in the valuation process, including the trustee and the JNC.
• The potential for the involvement of Scheme members in the valuation process and how more effective engagement with employers can be achieved.

The Panel is seeking submissions from stakeholders and others on the above subjects and is particularly interested in views on improvements that could be made to:

• The valuation process, and decision-making (rather than, at this stage of its deliberations, the methodology) and in particular the content and timing of different aspects of the process and engagement between the scheme and the various stakeholders; and
• The governance of the valuation process and in particular the role of different parties including UUK, UCU, the JNC, the trustees and others in providing that governance.

Submissions on the above matters or comments for the attention of the Panel are warmly welcomed and should be sent by 15th March 2019 to

The Panel will issue a further call for evidence in respect of part two of its enquiry in due course.

Report of the Joint Expert Panel

The first report of the Joint Expert Panel (JEP) is published today (13 September). The Panel was set up by the University and College Union (UCU) and Universities UK (UUK) following the recent industrial dispute over the Universities Superannuation Scheme (USS). The Panel comprises senior figures from the pensions sector as well as academic experts from within higher education and is chaired by Joanne Segars OBE.

The first report has undertaken a retrospective review of the 2017 valuation, including an assessment of the methodology, assumptions and process underpinning the valuation. Arising from this, the Panel has explored the scope for possible adjustments to the methodology which would allow the valuation to be concluded.

In launching the report Joanne Segars said:

“In reaching our unanimous conclusions and recommendations the JEP has, of course, had the benefit of hindsight – a luxury not available to the Trustee as it worked to a tight timetable to complete the valuation. Neither has it been the approach of the Panel to be critical of any party that has been involved in the valuation. Our observations, conclusions and recommendations are intended to be constructive and should be read in that spirit.”

The Panel unanimously recommends four areas where adjustments to the valuation should be considered:

  1. A re-evaluation of the employers’ attitude to risk, which would result in a re-evaluation of the reliance on the sponsor covenant.
  2. Adopting a greater consistency of approach between the 2014 and 2017 valuations, which affects the scale and timing of deficit recovery contributions.
  3. Ensuring fairness and equality between generations of scheme members by smoothing future service contributions.
  4. Ensuring the valuation uses the most recently available information which means taking account of recent market improvements, new investment considerations and the latest data on mortality, for example.

In addition, greater weight should be given to the unique features and strengths of the higher education sector. The Panel believes the combined effect of these changes would satisfy the employers’ overall appetite for risk as well as members’ desire to maintain broadly comparable benefits and would provide a constructive negotiating space for the stakeholders to reach a consensus on the way forward. It is the view of the Panel that the changes proposed are consistent with the Trustee’s fiduciary duties and the objectives of the Pensions Regulator and provide an opportunity for stakeholders to resolve the dispute.

Adjustments in each of these areas would have a material impact on the valuation and resulting contribution increases. The level of benefits is a matter for the stakeholders to negotiate. However, it is the Panel’s belief, based on independent actuarial analysis, that the full implementation of these adjustments could mean total required contributions estimated at 29.2% to fund current benefits (minus the 1% match). This compares to the current rate of 26% (18% of salary paid by employers, 8% by employees) and the rate of 36.6% from April 2020 which is proposed by USS, based on the valuation as it stands.

Commenting on those recommendations which propose adjustments to the valuation Joanne Segars said:

“The Panel does not underestimate the practicalities of concluding an actuarial valuation so long after the process began. However, the Panel believes it would be in the public interest if all stakeholders, including the Regulator, could find a way forward to implementing our recommendations within the 2017 valuation.”

The Panel also looked in detail at the methodology, assumptions and tests employed by the Trustee, and particularly at USS’s ‘Test 1’ which underpins the 2017 valuation. In the Panel’s view this test has assumed too much weight in determining the valuation.

The Panel concluded that this and other issues should be addressed by Phase 2 of its work which should seek to determine whether there is an alternative methodology for future valuations that could both provide long-term stability for the Scheme and enjoy the support of all parties. Phase 2 of the JEP’s work should also include a wider review of the involvement of UUK and UCU in future valuations so that a more collaborative approach can be adopted which would help to restore confidence in the Scheme.

Looking forward Joanne Segars said:

“We believe that our constructive and practical proposals for adjustments to the valuation can be implemented quickly and act as the cornerstone for a negotiated settlement. Ultimately it will be for all the parties to decide whether to respond positively, but we believe that the report provides a genuine opportunity to turn the page, to focus on the long-term stability of the USS and rebuild trust and confidence in the Scheme.

“Our report and its recommendations do not address all the issues faced by the Scheme. We believe further work is required by the JEP. This should include developing an approach to the valuation that is clear and which can deliver a sustainable scheme based on a shared set of principles.

“I would like to thank the many scheme members, employers and experts who have submitted views and evidence to the JEP. I would also like to thank USS for their cooperation and for the considerable resources they have laid at our disposal. While we have been grateful for all the support we have had the conclusions are ours alone.”


  1. The Panel’s members are: Joanne Segars OBE (Independent Chair), Ronnie Bowie (appointed by UUK), Sally Bridgeland (appointed by UUK), Chris Curry (appointed by UUK), Catherine Donnelly (appointed by UCU), Saul Jacka (appointed by UCU), Deborah Mabbett (appointed by UCU).
  2. The Panel’s purpose, as set out in its terms of reference, was to make an assessment of the 2017 valuation; focus in particular on reviewing the basis of the scheme valuation, assumptions and associated tests; agree key principles to underpin the future joint approach of UUK and UCU to the valuation of USS. The agreement set out that the Panel would take into account: the unique nature of the higher education sector, intergenerational fairness and equality; the clear wish of staff to have a guaranteed pension comparable with current provision whilst meeting the affordability challenges for all parties; and the current regulatory framework.
  3. The executive summary is attached to this release. The full report is available below.

For media enquiries contact:

Executive summary of the Report of the Joint Expert Panel

Report of the Joint Expert Panel

Further evidence heard from professional advisors

The Panel reviewed a number of recent submissions from stakeholders including employers, trade unions and individual members. These continue be helpful to the Panel, and we are grateful to all those who have taken the time to submit views and evidence. 

The Panel took evidence from PwC on their professional advice given to USS on the unique covenant of the UK higher education sector, and the diversity of the sponsoring employers of USS. In its discussion with PwC the Panel also considered the unique features of USS. 

The Panel also met with the actuarial advisors to UCU and UUK, First Actuarial and AON, to follow up an earlier session exploring the stakeholders’ assessment of the valuation process in greater detail.

In line with the Terms of Reference set by UCU and UUK, the Panel will publish its report in September. During meeting 8 the Panel went on to discuss its key messages and plans for publication. 

The deadline for submission of evidence is August 17 and you can make your contribution via submissions will be treated in complete confidence.

Joanne Segars, Chair, JEP
14 August 2018

Report of latest meeting and evidence session

The Panel heard from Ali Tayyebi (Scheme Actuary, Mercer) along with Jeff Rowney, Head of Funding Strategy, and Guy Coughlan, Chief Risk Officer of USS. This evidence session covered a range of topics including a closer look at Test 1, self-sufficiency, appetite for risk, calculation of discount rate and related issues.

In the discussion that followed, the JEP reflected on the initial presentations from USS having been informed by the evidence from other experts and submissions from stakeholders.  USS are committed to sharing a range of data relating to the valuation requested by the Panel.

Finally the Panel reviewed further work from the actuarial advisors of UUK (AON) and UCU (First Actuarial).

The Panel is continuing to receive submissions from stakeholders on a range of topics. A number of issues are more pertinent to phase two of the JEP’s Terms of Reference and the Panel will return to these submissions at a later point.  At the next meeting, the Panel will look at further evidence on scheme covenant and would welcome comments on this area.

Submissions should be sent to All submissions will be treated in strictest confidence. In order to ensure that submissions can be fully considered by the Panel it would be very helpful if submissions could reach the Panel by 17 August at the latest.

Joanne Segars, Chair, JEP
31 July 2018

Panel hears from USS trustee chair

The Panel heard from Sir David Eastwood, the Chair of the USS Trustee Board.

He gave the Panel an overview of the valuation process from the perspective of the Trustee including: the sovereign role of the JNC in terms of determining benefits; the principles upon which the Trustee operates; the impact of missing the statutory timetable set by the Pensions Regulator for completing the valuation; the calculation of technical provisions; the imposition of cost sharing; and the Board’s view of its relationship with the JEP.

In the discussion that followed, the JEP considered issues around: the parallel processes of its own report and the decision of the Trustee to invoke cost sharing; the relationship between the Trustee and the Executive; the nature of the tests used by USS and possible alternatives; the performance of the various functions of the USS governance arrangements; the role of the TPR in this valuation process; the quality of information available to members and the Trustee’s communication strategy; and the extent to which the Trustee was engaged in an on-going update of the valuation.

The Panel also separately considered evidence from Professors Miles and Gandy of Imperial College who presented contrasting views of the valuation and the security of benefits. Despite their differing views, the Panel found both presentations helpful and thanked both Professors for their evidence.

Finally the Panel took evidence from EY Parthenon who had performed a review of the HE sector on behalf of USS in advance of the 2017 valuation, as part of its assessment on the strength of the sponsor covenant. This had considered the future growth of the sector and factors that could constrain that growth. This work had contributed to USS’s assessment that the sponsor covenant strength was strong.

The Panel continued to derive considerable insights from the submissions sent to it and remain keen to hear from stakeholders on issues relating to the valuation, including the tests which underpin it, the assumptions and process. Submissions should be sent to All submissions will be treated in strictest confidence. In order to ensure that submissions can be fully considered by the Panel it would be very helpful if submissions could reach the Panel by 17 August at the latest.

Joanne Segars, Chair, JEP
17 July 2018

Chair’s report: 28 June 2018

The Panel reflected upon a range of issues relating to the verbal and written evidence they had received so far, including submissions from stakeholders.

Taking account of the Panel’s Terms of Reference which require the JEP to take account of a range of factors, the Panel discussed the valuation with reference to the unique character of the HE sector, assessments of equality and intergenerational fairness, the need to strike a balance between stability and risk, and the current legal framework, including the role of TPR.

The Panel also discussed and reflected on the evidence it had heard regarding the valuation methodology which underpinned the USS valuation including questions around the role of the three tests, de-risking, the time horizon of the covenant, the fund’s approach to integrated risk management, and comparisons between USS and other large-scale schemes.

The next series of meetings will see the Panel hearing from the Trustee and its advisers. The Panel will also consider evidence provided to it through its call for submissions. The Panel noted that its understanding of the key issues had been significantly enhanced by submissions made by stakeholders.

The Panel remains keen to hear from stakeholders on issues relating to the valuation, including the tests which underpin it, the assumptions and process. Submissions should be sent to All submissions will be treated in strictest confidence.

Joanne Segars
Chair, JEP

Chair’s report: 22 June 2018

The JEP has continued to gather evidence relating to the 2017 valuation. Evidence was taken from actuarial advisers First Actuarial, who act for UCU, and AON, who act for UUK.

Both firms of actuaries were asked for their views on a number of key aspects of the valuation including:

  • the three tests used by USS, and, in particular, Test 1;
  • the underlying assumptions used in the 2017 valuation; and
  • any alternative approaches that the Panel should consider.

While First Actuarial and AON each had distinctive views, the Panel considered that there were a number of common points and views on certain key areas and that this may be helpful in developing the Panel’s assessment and recommendations.

In addition the Panel considered the submissions received from stakeholders. The Panel was pleased to see good engagement from members and employers with the Panel’s work. The Panel will invite a number of those who have submitted evidence to provide further evidence (written or oral).

Having now met both the USS Executive and the actuarial advisers of UCU and UUK, the Panel took stock of the progress so far and considered how several issues would be assessed against the Terms of Reference. They will be reflected upon and evidenced in the September report being prepared for UCU and UUK.

The Panel continues to make good progress against the Terms of Reference.

The Panel reiterated their call for submissions from member and employer stakeholders on the following issues: the three tests used by USS (in particular relating to Test 1); the prudence or otherwise of the assumptions used by USS; the strength of the covenant; and alternative valuation models and assumptions to those used by USS.

Submissions on these matters or comments for the attention of the Panel are warmly welcomed and should be sent to All submissions will be treated in the strictest confidence.

Joanne Segars
Chair, JEP

Chair’s report: 12 June 2018

The Joint Expert Panel (JEP) held its second and third meetings on 6th and 7th June.

The Panel took evidence from representatives from USS (including USS executives and the Scheme Actuary) about the basis for the 2017 valuation, the covenant and the associated tests. The JEP has received a commitment from USS that it will provide the Panel with the information it needs to undertake its analysis and to fulfil its Terms of Reference.

Among the issues discussed by the Panel were the:

  • role of the Trustee’s Test 1 and evidence of any alternative approach considered by the Trustee;
  • extent to which a goal of self-sufficiency may or may not be appropriate for a unique sector;
  • covenant as the foundation of the valuation framework, including the basis for establishing risk appetite and risk capacity, the timing of de-risking and the volatility and risk associated with low risk investment strategies and alternative approaches;
  • assessments made of the strength of the sponsor covenant, given the unique features of the sector, including the relationship between the growth of the fund’s assets and the growth of the sector;
  • method used for calculating the technical provisions (TP) including the discount rate used, the TP relationship with the self-sufficiency liability and reliance on the employers, and the financial models used to calculate the discount rate;
  • quality and range of demographic data on USS members including mortality and retirement assumptions; and
  • Rule 76 of the Trust Deed and Rules (i.e. the USS cost-sharing rule) and its implications.

The Panel also heard from USS representatives about the legal and regulatory framework within which the valuation takes place. The discussion covered the uniqueness of the governance structure; the role of the JNC as a representative body; and the respective roles and involvement of employer and member representatives in the valuation process.

Finally, the Panel also took evidence from the Pensions Regulator (TPR) about their views of the valuation, including their assessment of the strength of the covenant, their attitude to different investment policies and their general approach to valuations.

The Panel agreed that their next meeting would take up the issues from these meetings with the actuarial advisers of UCU and UUK.

The Panel reiterated their call for submissions from member and employer stakeholders on the following issues: the three tests used by USS (in particular relating to Test 1); the prudence or otherwise of the assumptions used by USS; the strength of the covenant; and alternative valuation models and assumptions to those used by USS.

Submissions on these matters or comments for the attention of the Panel are warmly welcomed and should be sent to All submissions will be treated in the strictest confidence.

Joanne Segars, Chair, JEP
12 June 2018

JEP holds first meeting

The Joint Expert Panel (JEP) held its first meeting on Thursday 31 May.

The panellists noted that the JEP’s first task would be to make an assessment of the 2017 valuation, examining the basis of the valuation, assumptions and associated tests. The Panel also discussed and agreed an initial work plan for this task, noting the requirement in the Terms of Reference that a report needed to be prepared for UCU and UUK in September.

The Panel’s first set of meetings would be with USS (including their advisors) and The Pensions Regulator‎ (TPR) in order to establish the principles behind the current valuation and obtain the Regulator’s view.

UCU and UUK’s actuaries will then be called to advise the Panel on their approach and views on the 2017 valuation.

Suggestions were sought from JEP members for any academic or other experts in these areas who the Panel should meet.

The Panel also wished to meet representatives of the Trustees themselves in addition to executive officers of USS, and arrangements are in hand to meet the Trustee.

The Panel agreed that initial submissions from stakeholders should be sought on the 2017 valuation and in particular on: the three tests used by USS; the prudence or otherwise of the assumptions used by USS; the strength of the covenant; and alternative valuation models and assumptions to those used by USS.

Submissions on these matters or comments for the attention of the Panel are warmly welcomed and should be sent to

Joanne Segars
Chair, JEP
4th June 2018

USS JEP chair appointed

Joanne Segars OBE has agreed to be the Chair of the Joint Expert Panel (JEP) to examine the valuation of the Universities Superannuation Scheme (USS).

Joanne is a widely respected figure in the pensions community. She is currently the Chair of LGPS Central Ltd, which pools the investments of nine large Midlands-based local authority pension funds.

Prior to this, she worked for many years in senior positions in the pensions sector, including as Chief Executive of the Pensions and Lifetime Savings Association (PLSA) (previously the National Association for Pension Funds (NAPF)) for over 10 years and as Head of Pensions at the Trades Union Congress (TUC). Joanne is a current board member of NOW: Pensions, and the Environment Agency.

The JEP is tasked with agreeing key principles to underpin the future approach of the University and College Union (UCU) and Universities UK (UUK) to the USS valuation. As outlined in the panel’s terms of reference, a report from the JEP is expected in September 2018.

The panel was set up under an agreement reached between UCU and UUK at the Advisory, Conciliation and Arbitration Service (ACAS) in March 2018. Ms Segars was formally recommended to UCU and UUK by ACAS.

Further details, including the appointment of UCU and UUK panellists and the work plan for the JEP, will be announced later this month.

Joanne Segars said:

“I am honoured to have been appointed as the Chair of this important panel.  I am acutely aware of how important USS is to the sector and to those who work in it. Given the impact that the valuation has on future benefits and contributions, it is vital that stakeholders have confidence in the way it is carried out and I hope the JEP will make a major contribution to achieving this.

“If we are to be useful to UUK and UCU it is important that the panel members feel able to effectively challenge both each other’s views and those of our witnesses in a confidential environment. However, I also recognise that there is, quite rightly, considerable interest both from USS members and employers in the work of the JEP so I intend to provide regular reports about our progress and the issues we are discussing as well as a clear explanation of the evidence upon which we base any recommendations.  I believe it is critical that USS members and employers feel that they can influence the work of the JEP and I will warmly welcome submissions on any issue relevant to our work.”

UCU general secretary, Sally Hunt, said:

“Chairing the JEP requires someone who understands not just pensions but also the industrial relations environment in which USS operates. Joanne Segars has that unique combination of skills having given many years’ service to the trade union movement and also acted as a leading advocate for the interests of pension schemes and their members.  It is very important that the JEP enjoys the confidence of USS members and I particularly welcome Joanne’s commitment to provide regular reports to stakeholders as well as to seek submissions from fund members and others. UCU is entering the JEP in good faith and we hope that it will enable not just our current dispute to be resolved but also provide a basis for future agreement on the fund.”

UUK chief executive, Alistair Jarvis, said:

“Joanne is widely respected in the pensions world, with over a decade’s experience representing both employer and trustee views leading the PLSA (previously NAPF). She has a detailed understanding of the challenges facing pension schemes and will bring considerable experience and leadership to this important role. For employers, the JEP offers an opportunity to build confidence, trust and increase transparency in the valuation process. The work that Joanne will lead provides an opportunity to consider the questions raised about the valuation by scheme members and employers.”


  1. USS is one of the largest private pension schemes in the UK and is the principal scheme for academic and comparable staff in UK universities and other higher education and research institutions.
  2. The University and College Union (UCU) represents the interests of USS members.
  3. Universities UK represents the collective view of more than 350 higher education employers.
  4. On Friday 23 March, Universities UK and UCU published the proposal for the Joint Expert Panel.
  5. Earlier in May UCU and UUK agreed to the panel’s Terms of Reference.
  6. Further information about the panel’s work – including details of the six panellists – will be announced shortly.