The Tripartite Group (TG) discussion continued to focused on improving the JNC’s effectiveness, ensuring the communications can support trust and confidence between the parties, and meeting the needs of members. The TG received a further update on “quick wins” designed to improve the JNC’s effectiveness, though it was noted that the update had not been reviewed by the JNCEG. The TG felt the wording was helpful and proposed some drafting points.

It was agreed to seek a further meeting of the JNCEG to finalise the “quick wins” which it was felt would make a positive contribution to the operation of the JNC. At its previous meeting the TG group had discussed a draft communications ‘checklist’ the aim of which was to set a blueprint for the tone and approach, content, and actions required from any communication from the Trustee in relation to Board decision-making and the valuation. The aim was to provide stakeholders with greater clarity about how the Trustee had reached particular decisions, and why other options had been rejected.

It was agreed that this should also be used as a basis for formal communications about the Scheme and its valuation issued centrally by the Stakeholders. To provide clarity on its purpose, the TG agreed a preamble to the blueprint. To test its efficacy, it was agreed that the blueprint should be applied to a piece of Trustee communication. In light of the shared concern about the number of member opt outs from the Scheme the TG received a presentation from USS about the number of opt outs, trend and demographic analysis.

The TG welcomed the analysis and felt it gave a helpful perspective on the issues and potential solutions. It was agreed that this could be a helpful topic of conversation for the Strategic Discussion Forum. USS confirmed they would be happy to support the stakeholders’ discussions.

The Tripartite Group (TG) discussion continued to focused on improving trust and confidence between the parties, with a particular focus on communication. The TG also discussed improving the JNC’s effectiveness. The stakeholders then met again to discuss meeting the needs of members and developing the Strategic Discussion Forum.

The TG noted that the JNC Effectiveness Group (JNCEG) was continuing to discuss “quick wins” and that proposals were expected shortly. The TG looked forward to receiving the proposals which it was felt would make a positive contribution to the operation of the JNC.

The TG continued discussions on rebuilding trust and confidence. It was agreed communications, especially in relation to the valuation, played an important part in fostering trust and confidence between the parties. The parties also agreed that they each had a responsibility to communicate in a fair, accurate, evidence-based and respectful manner.

Building on the discussions at the previous meeting, the TG considered a draft communications ‘checklist’ which set out factors to be included regarding the the tone and approach, content, and actions required from any communication. The aim of the checklist was to provide stakeholders with greater clarity about how the Trustee had reached particular decisions, and why other options had been rejected. Whilst this was initially drafted to support clearer communication by the Trustee, it was acknowledged that there was scope for the checklist to be
adopted for formal communications about the Scheme and its valuation issued centrally by the Stakeholders. It was agreed to further develop the checklist. To provide greater clarity as to the purpose of the checklist, it was agreed to develop an introductory statement. In addition, to test its efficacy an existing piece of communications would be retro-fitted to the checklist.

All parties had raised concerns about the number of opt outs from the Scheme which was higher than comparable schemes. It was noted that USS was extending the analysis considered earlier in the year at the request of Stakeholders. This would be shared at the next meeting.

It was noted that the TG had been in operation for a year. During that time, good progress had been made, including the production of a stakeholder purpose statement (to sit back-to-back with the Trustee’s purpose statement); Shared Valuation Principles; a shared statement on scheme sustainability; proposals for a Strategic Discussion Forum (SDF); and a workstream under the auspices of the JNCEG to enhance the operation of the JNC. The TG agreed that it would continue to work to the end of the year and complete activity on current work areas (JNCEG, communications, and finalizing the SDF, with work being carried forward by the SDF) from the start of 2021.

Summary note of meeting 14

The Tripartite Group (TG) discussion focused on improving the JNC’s effectiveness and re-building trust and confidence. The stakeholders then met to discuss meeting the needs of members and developing the Strategic Discussion Forum.

The Tripartite Group noted that discussions were continuing within the JNC Effectiveness group (JNCEG) aimed at identifying “quick wins” to improve the operation of the JNC. It was likely that these would cover using pre-meetings with the chair and between the stakeholders to ensure time could be used more efficiently, training for JNC members, and an acceptance that JNC members could have different perspectives on an issue. The TG welcomed the work that had been undertaken to date and was keen to see it move forward. It was noted that the second phase of the JNCEG’s work was intended to kick off in the early autumn and that the JNCEG would draft terms of reference for this exercise shortly. The TG agreed it would be important to focus on the purpose and outcome of this exercise, namely looking at the issues that impede the effectiveness of the JNC (e.g. role and remit) and measures to address them.

The TG started a discussion on how to rebuild trust and confidence. An earlier exercise had identified a number of issues that had undermined trust and confidence. These had been grouped into three themes: disclosure of information and transparency and recognition of confidentiality; improved dialogue, visibility and communications; recognition of respective roles and duties (information flow and talking about the big issues). The TG began a discussion on the first of these issues.

It was agreed that a large amount of data, especially relating to the valuation, was confidential and that there was a need to protect and respect that confidentiality. It was also recognised, and welcomed, that compared to other schemes, USS provides a significant amount of information to members and stakeholders. While recognizing that people may reach different decisions, the TG discussed the need for the Trustee to more clearly articulate how decisions are reached based on the data and evidence available. This would help build understanding of the basis for decisions. In this regard, it was suggested that it would also be helpful to set out why one option was favoured over another. The TG also discussed the specific nature of the USS membership which is based on a culture of constructive, academic challenge using independent analysis and access to data provided without narrative. It was acknowledged that requests for large volumes of data could consume valuable resource. It was agreed to continue this discussion.

In their discussions on meeting the needs of members, the stakeholders shared concerns over the high level of opt outs in the Scheme, are currently in the region of 15-20%. It was agreed that this problem should be addressed. The stakeholders also agreed to develop the Strategic Discussion Forum (SDF) the purpose of which is to consider some of the longer term issues affecting the Scheme. It was agreed to continue these discussions.

The Tripartite Group continued to focus on the JNC and steps that could be taken to improve the effectiveness of the JNC. This followed earlier discussions which had identified a) some of the factors that were inhibiting the JNC from operating as effectively as it might and b) some of the features of a high-performing, effective JNC. This process had identified some common ground in terms of inhibitors as well as features of effectiveness.

The Tripartite Group considered an update from the JNC Effectiveness Group (JNCEG) which had been commissioned to consider issues around the effectiveness of the JNC. The JNCEG had received two “asks” from the Tripartite Group:

1. An options paper which considered issues relating to the operation and effectiveness of the JNC, including their pros and cons
2. To undertake an in-depth analysis to diagnose the JNC’s effectiveness (or otherwise), ie why the JNC is not operating effectively.

The JNCEG discussions had allowed time to consider a series of actions and behaviours which could be adopted by the JNC, stakeholder groups and USS which could contribute to the JNC’s long-term success and the continued building of trust. In particular, these focused on role and remit, trust, use of time and planning and effective meeting operation. The Tripartite Group agreed that the JNCEG’s work was progressing well and that it was clear that some good and honest discussions were taking place.

Based on the output from the JNCEG the Tripartite Group agreed it would be helpful if the JNCEG could consider roles and responsibilities of the JNC and any ways in which this might be different from the current position; views on the time commitment needed by JNC members, noting that there are now more demands on JNC members’ time; solutions as well as the analysis of what does not work well. It was noted that resolving these issues is critical and as such could not, and should not, be rushed.

The Tripartitie Group also considered future work programme. These included defining in further detail the role and scope of the Strategic Discussion Forum and work to help promote greater trust and confidence between the parties. It was noted that these items might require bi-lateral discussions between UCU and UUK initially.

Summary Note – Meeting 11

The Tripartite Group continued its discussion around improving the effectiveness of the Joint Negotiating Committee (JNC).

The Group considered what each party felt ”good” would look like in relation to an effective and high-performing JNC. Views common to all three parties included operating with mutual trust, respect and openness and a clear recognition of roles and responsibilities.

The Group went on to consider the factors that currently hinder the effectiveness of the JNC, i.e. prevent it from operating with the features identified as characterising high performing. Issues identified included:

• Issues are not dealt with in a timely fashion and/ or real engagement comes too late in the process;
• Discussions are often adversarial and rarely collaborative
• Parties do not always have the information they need
• Roles and responsibilities may not well understood or can be conflated with other responsibilities.

It was agreed to provide these thoughts to the JNCEG to support their additional work diagnosing the factors that hinder the effectiveness (or otherwise) of the JNC. It was noted that the JNCEG would provide a report to the Tripartite Group shortly.

The Tripartite Group also received a presentation from UUK which summarized the final report from UUK on its consultation with USS employers on the recommendations of the JEP’s second report. This showed strong support for the JEP’s recommendations. Employers welcomed the proposal for a joint purpose statement, shared valuation principles and sustainability statement. There was also support for the JEP’s proposals around developing alternative paths to the valuation and using a dual discount rate methodology. Employers had also expressed a desire for a focus on value for money and a clear articulation of the trade-offs of risk and reward and how this would contribute to sustainability. There was support for the establishment of a valuation methodology discussion forum (which had already been set up by USS). There was also support for more flexibility for members to address the high level of opt outs from the Scheme. Mutuality was largely seen as being a positive feature of the Scheme.

It was agreed that the Tripartite Group would consider its future work programme at its next meeting in June.

SUMMARY NOTE – MEETING 10

The Tripartite Group received a brief update on the valuation discussion document which had been issued by the Trustee.

The Tripartite Group considered the JNC Effectiveness Group’s (JNCEG) report. This report set out a number of options to improve the effectiveness of the JNC, including the pros and cons of those options. The starting point for this piece of work had been the JEP’s second report, but the JNCEG’s work was not constrained by the JEP’s report. The report set out options covering a wide range of issues relating to the current operation of the JNC and how that might be enhanced.

Following on from its consideration of the JNCEG’s report, the Tripartite Group held a discussion on the JNC’s effectiveness as a result of which a second piece of work was commissioned from the JNCEG.

This second piece of work asked the JNCEG to undertake a more in-depth piece of analysis to
diagnose the JNC’s effectiveness (or otherwise) and to consider the factors that have hindered its effectiveness. In other words, it asks the JNCEG to consider why the JNC is not operating effectively asight be desired. It was proposed that this assessment should take place against the three core functions of the JNC: acting as a check and balance to the Trustee in certain areas; rule changes; and deciding on contribution increases or decreases and/or benefit changes where the cost-sharing provisions are invoked following a valuation. The JNCEG was also asked to consider what “good” might look like in terms of a high-functioning JNC. This exercise would also be undertaken by the stakeholders and the Trustee for discussion at a future meeting.

Finally, it was agreed to seek dates for future meetings in June.

In light of the government guidelines, the meeting took place via Video Conference.
The Tripartite Group received an update from USS regarding the work of the Valuation Methodology Discussion Forum which had continued to meet.

The Tripartite Group went on to consider the draft report from the JNC Effectiveness Group (JNCEG). This Group had been commissioned by the Tripartite Group to consider and set out options for how the JNC could be made to work more effectively. The JNCEG had been asked to take the JEP’s recommendations as its starting point, but not to be limited by these recommendations. The JNCEG had set out, as its emerging views, a set of options covering a range of issues relating to the operation of the JNC. These included: greater visibility of the USS Board of Directors; the Trustee’s Committee structure and valuation matters; a joint forum on valuation matters; improving the effectiveness of the JNC (which had a number of dimensions); a high-level steering committee on strategic issues; employer representation in USS; and member representation in USS.

The Tripartite Group held high level discussions on the JNCEG’s draft report. It was noted that a number of changes had already been implemented, such as Trustee Director attendance at JNC meetings and the creation of the VMDF. These had helped build understanding of the issues and had helped to build trust and confidence. Discussion took place around how these developments could be further enhanced. The Tripartite Group welcomed the JNCEG’s work and requested further work to be undertaken.

In light of the emerging issues relating to COVID-19 it was agreed to shorten the meeting to enable stakeholders and the Trustee to respond to current issues.

The Tri-Partite Group agreed the final wording of the joint definition of sustainability. This is attached with this meeting summary, along with the Scheme Purpose Statements from the Stakeholders and the Trustee and the Shared Valuation Principles.

The Tri-Partite Group discussed the work of the Trustee’s Valuation Methodology Discussion Forum (VMDF), which had continued to meet, and the USS Discussion Document which had been published since the Tri-Partite Group had last met.

Stakeholders noted the publication of the Discussion Document by USS. A discussion took place on ensuring that the Discussion Document was as clear as possible. This would in turn ensure that Stakeholders (in particular, participating employers) could respond in as full a manner as possible to aid the Trustee’s deliberations. It was agreed to sat up a call with the Stakeholders’ actuarial advisers (AON and First Actuarial) and USS to discuss and clarify a number of technical issues relating to the Discussion Document.

The Tripartite Group learned that the JNC Effectiveness Group was making good progress and would be ready to present its initial views shortly.

The Tri-Partite Group received a report from UUK summarising the outcome of their consultation with members on the JEP report and matters relating to the 2020 valuation. Overall, the consultation had revealed strong support for the JEP’s recommendations. Areas of support included having a shared common Scheme purpose, the shared valuation principles and a dual discount approach to the valuation methodology. There was a strong support for the JEP’s recommendations around meeting the needs of members and a desire to explore options around contributions flexibility to address the high level of Scheme opt outs. There was a common view that issues needed to be dealt with in parallel to the current valuation cycle.
It was agreed that the next meeting would take place on 24 March. The final format of the meeting and content would remain under review in light of the current situation.