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.
Guy 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.”