Michael Otsuka Profile picture
Sep 29, 2018 25 tweets 11 min read Twitter logo Read on Twitter
🚨💣😱.@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: 1/
"We would be concerned if the increase in visibility of a strong covenant was used to support a less prudent approach to the 2017 valuation than that adopted in 2014, either in terms of the assumptions adopted or the time horizon for de-risking." 2/
We are all aware that tPR's challenge, in their Sept 2017 letter, to the PWC/#USS assessment of the strength of the covenant, wreaked havoc on our DB pension and helped explain the shift to the more conservative November valuation. 3/
This is of a piece with various other pieces of information that have come to light, regarding Cambridge's efforts to undermine #USS's DB pension scheme. See here: 4/
The full text of Cambridge's challenge to the strength of the covenant here: 8/
To add insult to injury, the author of the response, Sue Curryer, who is Head of Pensions Administration at Cambridge, notes that "The response has not been considered by the governing body in advance of submission". 9/
It is also telling that Cambridge's expresses opposition to a relaxation of the excessively prudent assumptions of the 2014 valuation and the linear de-risking over 20 years, starting now, of that valuation. 10/
They express such opposition in spite of the fact that, in their 2014 consultation response, Cambridge was fairly sceptical of the 2014 valuation, noting back then that it appeared to be 'overly prudent'. 11/
Perhaps the following helps explain Cambridge's shift in position between 2014 and 2017: 12/12
Cambridge's assessment of the strength of the covenant (which was drafted by Jonathan Seed) is at odds with that of the Joint Expert Panel.
It would be good to learn of any discussion or correspondence between Cambridge PWG members (including their outside actuary) & the Pensions Regulator. To what extent did Cambridge try to persuade tPR to adopt their more pessimistic assessment of the strength of the covenant? 1/
tPR's Sept 2017 assessment of the covenant as "tending to strong" rather than (as PWC had assessed it) "strong" is harshly criticised in the JEP report. It was also rejected by all parties: USS, UUK, UCU, and their actuaries. 2/
Not only was tPR's assessment regarded as unfounded. It also played a key role in undermining the prospects of a negotiated settlement between UUK and UCU. 3/
Although @Cambridge_Uni has recently been fairly forthcoming in responding to FOI requests (for which they should receive due credit), they have refused the following request by @ProfBillCooke (see link) for: 4/
"...all details you hold on meetings and correspondence between your staff
and representatives of The Pensions Regulator in the last three years..."

It was rejected on grounds that compliance, combined w Prof Cooke's other FOI request, would be too costly (time-consuming).
It would be good to submit a narrower request limited to discussion or correspondence with tPR by Cambridge's VC, their CFO (Anthony Odgers), their actuary (Jonathan Seed) in his capacity as Cambridge adviser or rep, plus (other) members of their Pensions Working Group. 6/
I hope members of Cambridge's governing body (i.e., the thousands of academics and other university members of Regent House) call for an investigation of the various responses to #USS consultations Cambridge officials have been submitting... 7/

...without your authorisation and not in your name. I believe that these responses to various #USS consultations will be shown to be radically at odds with the will of the university's governing body. 8/
Members of Regent House: please don't let officials submit yet another unauthorised response to the current (linked) employer consultation on the JEP report, which is once again radically at odds with your will. 9/9

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More from @MikeOtsuka

Oct 6, 2018
.@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. 1/
In that blog, I ask: "Do you think union members would vote to authorise a strike for a No Detriment elimination of their 1.1% rise for three years rather than accepting the JEP-modelled solution?" 2/
.@UCL_UCU's rejoinder is that they are proposing a negotiation of a No Detriment elimination of any rise in contributions, not only of the modest 1.1% over the next three years, but also beyond that three year period. 3/
Read 18 tweets
Oct 3, 2018
.@UCL_UCU branch officers reveal that they misunderstood an important aspect of the JEP report when they pushed for their No Detriment motion today. In the embedded tweet, they write that JEP "don't refer accrual rate to JNC": 1/
In my subsequent exchange with @UCL_UCU that begins with the embedded tweet, I demonstrate that it is just as clear that they refer accrual rate to JNC as that they refer cost-sharing to JNC. 2/2
Read 5 tweets
Oct 3, 2018
A query for @UCL_UCU regarding their tweet below: 1/
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? 2/2
Here I elaborate on my above query, in an email to @UCL_UCU President Sean @SeanAWallis or anyone else who would like to respond:
Read 5 tweets
Oct 3, 2018
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: 1/
I say more about the significance of Sam's Addendum in this blog post, where I also explain why #USS and @GuyCoughlan owe us an answer to Sam's findings. 2/
I believe that, so far, this is the only response @Sam_Marsh101 has received: 3/
Read 11 tweets
Sep 26, 2018
JEP RECOMMENDATION #3: Smooth the cost of future service contributions over at least the next 6 years. As this chart indicates, this would reduce contributions by 1.5%. 1/
#USS's failure to smooth the cost of future service contributions constitutes a significant hidden layer of prudence. See this blog post: 2/
...and this blog post: 3/
Read 8 tweets
Sep 26, 2018
Now that @AlistairJarvis's @UniversitiesUK has opened the linked consultation, it's important for @ucu & #USS members to make the case to our employers to STRONGLY & PUBLICLY support all 4 JEP recommendations. Links below to arguments in support. 1/
Embedded thread w/ arguments in support of JEP recommendation #2, re lowering of deficit recovery contributions. 2/
Embedded thread w/ arguments in support of JEP recommendation #3, re smoothing of cost of future service, which draws on @Sam_Marsh101's cashflow data analysis. 3/
Read 20 tweets

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