Reporter 8/5/03: Universities Superannuation Scheme: Report by the actuary on the actuarial valuation of USS as at 31 March 2002

Universities Superannuation Scheme: Report by the actuary on the actuarial valuation of USS as at 31 March 2002

5 May 2003

The Council give notice that the report by the actuary on the actuarial valuation as at 31 March 2002 is now available.

The results of the valuation may be summarized as follows:

1. The employers' contribution rate is maintained at 14% of annual salary.

2. The overall past service surplus of £162m represents 1.0% of the past service liabilities of the scheme. There is a surplus of £75m attributable to the Supplementary Section leaving a past service surplus of £87m in the Main Section.

3. The institution contribution rate required for future service alone is 14.25% of salaries.

4. To fund the reduction of 0.25% below the institution contribution rate of 14.25% of salaries for the next twelve years will require the use of £82.5m of the Main Section surplus. This period of twelve years is the average outstanding working lifetime of the current members.

5. The contribution rate will be subject to review at the next actuarial valuation, which would normally take place at 31 March 2005.

Whilst asset values have declined since the valuation date, the conservative assumptions used in the valuation enable the actuary to be of the opinion that the scheme remains well funded. The fund continues to enjoy a positive cash flow with the aggregate of contributions and investment income exceeding benefit payments. In these circumstances the fall in the value of the fund's investments is not of immediate concern since USS has no requirement to sell investments to meet its pension liabilities.

The full report can be viewed on the USS website at http://www.usshq.co.uk/; alternatively copies of the report can be obtained from Mrs S. E. Curryer, Head of Pensions Administration, Finance Division, 10 Peas Hill, Cambridge, CB2 3PN (tel. 01223 332214).

Table of Contents

1.	The employers' contribution rate is maintained at 14% of annual salary.
2.	The overall past service surplus of £162m represents 1.0% of the past service liabilities of the scheme. There is a surplus of £75m attributable to the Supplementary Section leaving a past service surplus of £87m in the Main Section.
3.	The institution contribution rate required for future service alone is 14.25% of salaries.
4.	To fund the reduction of 0.25% below the institution contribution rate of 14.25% of salaries for the next twelve years will require the use of £82.5m of the Main Section surplus. This period of twelve years is the average outstanding working lifetime of the current members.
5.	The contribution rate will be subject to review at the next actuarial valuation, which would normally take place at 31 March 2005.