Lex is right to criticise the University Superannuation Scheme for academics and senior staff in the “old” pre-1992 universities (“UK university pensions: bottom of the class”, August 31). But in quoting USS’s “official” actuarial deficit of £6.6bn — which can be conveniently massaged — Lex understates how bad things really are.

The USS also publishes a valuation showing how much the Pension Protection Fund lifeboat would be on the hook if it went bust, using prescribed assumptions which cannot be massaged. The 2019 report shows a Pension Protection Fund deficit of £23bn at March 2017 — £60bn of assets and £83bn of liabilities — one of the weakest funding levels of any UK pension scheme.

The USS’s proposed deficit contributions are just not enough to plug the deficit, and the Pensions Regulator is pressing universities to pay in more cash, more quickly, which they are not prepared to do.

But it’s not all bad news. Two of the USS’s in-house investment team were each paid £1.75m, despite missing both its one-year and five-year performance targets, by a country mile. Nice work if you can get it.

John Ralfe
John Ralfe Consulting,
Nottingham, UK

Get alerts on Letter when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)