Pension scheme 'fully funded', valuation finds

二月 5, 2009

The Universities Superannuation Scheme had more than enough assets to pay for current and former members' pensions as of 31 March 2008, the scheme's valuation report, due out this month, will say.

But the valuation assumes that USS investments will outperform low-risk government bonds. If they do not, the scheme could face a funding "black hole" of more than £11 billion.

The latest valuation is the first carried out using new methodology introduced in the 2004 Pensions Act. Using that methodology, the scheme has a funding surplus of 3 per cent, which equates to £707 million.

This calculation assumes that the return on the scheme's investments, which are mainly in company shares, will be 2 per cent greater than what would have been achieved if the entire fund had been invested in government bonds, or gilts.

Colin Busby, a spokesman for the USS, said: "On the basis that the scheme is fully funded under the new funding regulations, we will not be asking employers for extra contributions to meet any funding shortfall, because the trustee board believes its long-term funding strategy will deliver its target of being fully funded on its historic basis."

Aside from the funding of past service, the USS has already told employers that it will need to raise their contribution to the scheme by 2 per cent in 2009 to meet future pension costs.

The University and College Union and employers are currently in discussions about potential changes to the scheme, which may include adjustments to benefits or to employee contributions.

melanie.newman@tsleducation.com.

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