During the Special Strike Ballots Extraordinary General Meeting, one of our invited speakers and USS pensions expert Sam Marsh (UCU elected negotiator on the JEP) was asked if he could clarify recent entries in the Exeter Rumour Buster, something only available to University of Exeter users.

The questions asked in the Rumour Buster were: (13/09/2019) “Are USS members £240,000 worse off in retirement because of changes to USS?” and a follow-up (16/09/2019) “Since Andrew Connolly’s response on 16/9/2019 to the rumour posed on 13/9/2019 completely failed to answer the question, would he like to try again to explain what was actually wrong with the actuarial calculation, and/or supply his own alternative figure? Irrelevant discussions about contribution rates and revaluations should be avoided.”

So after the meeting we asked Sam if he could take a look for us and help us to clarify what this was about. Below is the full informed response from Sam:

Andrew’s response is not to challenge the calculation itself, but to try to find reasons why the figure is misleading. Essentially it comes down to “it’s true that you’ll be £240,000 worse off over your working life, but that’s the fault of the financial markets!“.
The talk about the “cost of providing defined benefits” is a reference to low interest rates (particularly gilt yields), and how much it costs to buy annuities. There are good arguments as to why this is not necessarily the way to look at a multi-employer scheme which is cashflow positive (such as USS), and why the “cost of providing defined benefits” in USS may not have been affected so much by the fall in gilt yields (see, for example, my submission to the second phase of the Joint Expert Panel).
Essentially, the First Actuarial analysis is sound; Andrew has attempted to advance arguments as to why there was no other option but to reduce the total benefits due to us as members and increase the costs.

A recording of the Extraordinary Meeting is available for viewing here together with essential FAQs. Further materials can be found here: