TPR reprimands USS over document misrepresentation

Universities Superannuation Scheme (USS) was reprimanded by The Pensions Regulator (TPR) after it distorted the view of the regulator in a document proposing higher contributions by employers and members.

The UK’s university pension scheme was accused of describing TPR’s position on discount rates incorrectly, the measure used to value pension plans’ liabilities, using the regulator’s views to defend its stance on the scheme, the Financial Times reported.

Under USS proposals, around 200,000 members of the of the scheme would pay hundreds of pounds a year in extra contributions, as well as hundreds of millions in employer retirement benefit costs.

USS outlined the plans in a document in January, however TPR sent an email later that month which stated that the regulator’s views were misrepresented.

According to the Financial Times, the watchdog sent an email to USS head of funding strategy, Jeff Rowney, stating their document was “incorrect” as it did not favour one approach to setting discount rates.

Furthermore, USS said that the discount rate used for the 2017 valuation of the plan, gilts plus 1.2 per cent, was above the level the watchdog “views as appropriate”, another claim denied TPR said was “factually incorrect”.

The regulator’s complaint came to light after union-appointed USS trustee board member, Professor Jane Hutton, raised the discrepancies between the consultation document and the regulator’s views on discount rates at a panel meeting in March.

The email from the regulator was only shared with the trustee board in May, after Hutton sought confirmation from the regulator about its position on discount rates.

The Financial Times reported the TPR did not demand that USS correct the wording, just that they “consider doing so”.

In addition, the watchdog is separately investigating claims that Hutton was obstructed by the USS board from establishing whether the scheme exaggerated its £7.5bn deficit in its 2017 valuation.

Last week, further strike action was threatened by the University College Union if universities do not rule out benefit cuts or contribution increases.

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