Valuation

Updated December 2019

These are academic or semi-academic articles on 'valuation methodology' (or 'funding method') for USS and DB schemes in general.

The 'accrued liabilities' funding method is the one embedded in the Pensions Act 2004.

The discount rate and its implications for defined benefit pensions, Woon Wong, Cardiff Economics Working Papers, Mar 2019 
Argues that low gilt yields do not imply low returns on other asset classes

Pensions regulation based on mark-to-market valuation lacks transparency and overstates risk, Dennis Leech, Oct 2018
Argues against the current capitalisation of liabilities approach to DB scheme funding on grounds of unreliability, lack of transparency, circular reasoning and negative macroeconomic effects

How should scheme liabilities be measured? Alex Janiaud, Pensions Expert, Sep 2018

Funding defined benefit pensions schemes: an integrated risk management approach, C.A. Cowling et al, Institute and Faculty of Actuaries, Nov 2017

Determining discount rates required to fund defined benefit plans, John Turner et al, Society of Actuaries, 2017
Argues that discount rates should be set by first setting an acceptable probability that future contributions of a certain size may have to be made to ensure that liabilities are met, and then calculating a discount rate that gives that probability

Pension scheme redesign and wealth redistribution between the members and sponsor: The USS rule change in October 2011, Emmanouil Platanakis and CharlesSutcliffe, Insurance: Mathematics and Economics, July 2016
Assesses the detrimental effects on scheme members of the 2011 rule changes

Pension provision in the higher education sector, Peter Thompson, UUK, Jun 2008

Being actuarial with the truth: a story of economic confusion over defined benefit pension schemes, Simon Carne, Aug 2004
Argues that funding levels should be based on cash flow projections