USS deficit provision modeller published

28 June 2023      Matt Sisson, Projects and Membership Manager

The updated USS modeller for 2023 is now available from the BUFDG website.

Following feedback from the 2022 audits, this updated model provides additional explanatory notes within the ‘inputs’ tab. Please also see the statement from USS below regarding a change to the modeller regarding the headcount increase assumption, and note that there has been no change made to the method used to discount the provision.

We expect discount rate assumptions to follow in August.

‘’USS has made an adjustment to the pension deficit modeller for 2022/23 to incorporate a 1/12 element to the increase in headcount throughout the year, this improves the accuracy of the model by reflecting the reality of headcount increases which are likely to be incurred gradually throughout the year. The salary increase assumption is applied in full annually as this reflects more closely how most organisations apply pay increases. If these assumptions are not appropriate to an individual institution, the formulas in the model can be adjusted to allocate the increase in a tailored way.

USS has also considered feedback around the method used to discount the provision, which applies a full annual discount to the monthly cashflows. At this stage we consider that the additional complexity monthly discounting would add to the model would outweigh its usefulness. The modeller has to be appropriate to the widest range of institutions possible but especially to smaller institutions which may require more support with calculating the provision. The use of the modeller is not mandated by USS and larger institutions may wish to apply their own more tailored calculation in agreement with their external auditors.”

If you have any questions about the modeller, please contact Peter Fielding.

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