04 December 2015 
Karel Thomas, Executive Director
A reminder that new modellers are now available to calculate the USS deficit liability. The first is for the 2012 deficit recovery plan and calculates the value of the provision in the transition date balance sheet as at 1 August 2014. The second modeller covers the 2015 deficit recovery plan and can be used to calculate the value of the provision and the associated accounting entries for 2015/16. The models allows you to input different salary inflation assumptions in each year of the plan should you wish to. It also now includes the ability to reflect volume changes to staff membership of USS in each year of the plan. BUFDG is grateful for the help and assistance of USS in developing these models.
The discount rate should be a high quality corporate bond whose term should cover the remaining duration of the plan. This could be taken as an average age or you could take a 1-year bond for the 1st year payment, a 2-year bond for the 2nd year payment etc. This is a decision for your institution to make. Advisers will be happy to advise institutions but indications of rates can be found on websites such as Fixed Income Investor or Investors Chronicle.
Thank you to colleagues from USS and Andrew Connolly (Exeter) who have produced this tool.
