Mr. Galvin said in a letter to colleagues accompanying the monitoring update that rising U.K. gilt yields and robust equity prices "have contributed to a notable improvement in the implied funding position."
The monitoring report said: "If the 2023 valuation reflects a significantly improved financial position relative to the 2020 valuation, it may be possible to increase benefits, decrease contributions or do a combination of both."
The plan is set to publish its official 2023 valuation later this year, updating its March 31, 2020, valuation. A Q&A document accompanying the letter and update stressed that there may be differences between the official actuarial valuation and the funding position in the monitoring update.
"However, the direction of travel is clear," Mr. Galvin said in the letter. He highlighted that the plan's implied future service contribution rate in respect of the current level of benefits as of March 31 decreased to 17.5%, vs. 25.2% at the March 31, 2020, valuation and 21.8% for the pre-April 1, 2022, benefit structure.
"We are still in the process of collecting and considering the comprehensive evidence and advice that will inform the trustee's robust assessment of the position in respect of the 2023 valuation, ahead of the consultation with Universities U.K. (on behalf of employers) on the proposed technical provisions," Mr. Galvin said.
However, the plan has told its joint negotiating committee, made up of employer and participant representatives who are able to propose and approve plan rule changes, that the overall contribution rate required for the current level of benefits is very unlikely to be in excess of 20% of payroll.
Mr. Galvin also updated colleagues on the ongoing investigations into a cyber incident with Capita, which suffered a cyber attack in March.
USS, which uses the firm's technology platform to support its in-house pension administration, said in a May 12 statement attributed to Mr. Galvin that the plan had been informed that Capita "could not guarantee the security of certain files" and had notified its members about the situation.
In his May 18 letter, Mr. Galvin added that USS had emailed more than 400,000 participants to alert them to the event and had sent letters to those who had not shared email addresses with the plan. USS has also published information on its website regarding the incident.
"I want to assure you that data privacy and security is a top priority for us. Having reviewed our own systems and controls to ensure they remain robust, we are very confident members' pensions remain secure. But we know our members will be concerned about their personal data. We very much regret that this has happened and are committed to supporting them through this issue," Mr. Galvin added.