PFaroe will strengthen the production of liability valuations, evaluate risk, conduct ad hoc investigations and support the production of the triennial actuarial valuation.
Universities Superannuation Scheme (USS), one of the largest pension schemes in the UK, will use RiskFirst’s risk management platform PFaroe to support its regular liability valuations and ongoing risk analysis.
USS will use PFaroe to strengthen the production of liability valuations, including those used in monitoring the scheme’s funding position, evaluate risk, conduct ad hoc investigations and support the production of the triennial actuarial valuation.
Guy Coughlan, Chief Risk Officer at USS, said: “The trustee recognises that risk needs to be managed in an integrated fashion across assets and liabilities in order to make optimal decisions. It is therefore imperative that we have the in-house capability to value and model liabilities and assets appropriately in changing market conditions and under different economic scenarios. The PFaroe platform is a crucial element in delivering this goal.”
PFaroe will also enable USS to stress-test liabilities against different economic, market and demographic assumptions. Funding, cash flow and risk information produced by PFaroe will be used by the trustee and the scheme’s investment arm, USS Investment Management Ltd, to inform decisions around investment strategy.
Coughlan said: “PFaroe will allow us to deepen our understanding of the scheme’s liabilities and the risks it faces. I have no doubt that its flexibility and practical ease-of-use will support the development of new insights and drive an increasingly sophisticated dialogue with our scheme actuary, Mercer, whom we highly value for their expertise and independent perspective.”
Mercer recently signed an agreement with RiskFirst to offer PFaroe to clients and pension schemes.
Matthew Seymour, CEO, RiskFirst, said: “Having both USS and Mercer using PFaroe as a tool for liability valuation and risk analysis marks the beginning of a new collaborative way of operating for pension schemes. As a web-based platform that allows easy interchange of data, PFaroe is perfectly placed to facilitate this new operating model. We have started to see a trend in a number of other schemes now wanting to work in this way.”
Universities Superannuation Scheme was established in 1975 as the principal pension scheme for universities and other higher education institutions in the UK. It has over 330,000 scheme members across nearly 400 institutions and is one of the largest pension schemes in the UK, with total fund assets of approximately £49 billion.
The scheme’s trustee is Universities Superannuation Scheme Limited, a corporate trustee which provides scheme management and trusteeship from its offices based in Liverpool and London. The trustee company delegates implementation of its investment strategy to a wholly-owned investment management subsidiary company – USS Investment Management Limited – which provides in-house investment management and advisory services.
For more information on Universities Superannuation Scheme please go to uss.co.uk.