Battle lines drawn over the future of UK’s biggest pension fund




The UK’s biggest private pension scheme, the Universities Superannuation Scheme (USS), was no different: the custodian of the retirement savings of 470,000 university and college workers lost billions of pounds.

At its latest valuation, actuaries came up with an alarming conclusion: the assets of USS were only worth £67bn, leaving a huge deficit of £18bn compared to the liabilities it has promised to pay out in the future.

Yet the recovery was almost as extraordinary as the decline. Central banks pumped money into the economy, and tech companies in the US recorded astonishing gains. That helped USS assets back to more than £90bn at the end of January.

That recovery – and the controversial question of how the fund accounts for it – has put USS at the centre of a row that could result in university staff occupying picket lines across the country. The scheme will also be at the centre of a legal battle this month, with academics asking a court for permission to sue directors for not performing their duties.


 In a paper published in September, David Miles, professor of economics at Imperial College London and a former Bank of England monetary policymaker, and James Sefton, also an Imperial economics professor, argued that the risk of USS having insufficient funds to pay promised pensions was between 20% and 40%.

Simon Pilcher, chief executive of USS Investment Management, is in charge of choosing the actual investments. “Sadly, one can’t project the past into the future,” he said.

“Today, we think it is reasonable to expect lower returns going forward than we’ve experienced in the past, because it’s those higher returns that have driven us to these high prices.”

Author(s): Jasper Jolly

Publication Date: 5 Feb 2022

Publication Site: The Guardian

British pension funds plough more cash into China



British pension funds are ramping up their investment in Chinese companies despite growing tensions between the West and the Communist state.

According to a new report by Hong Kong Watch, a pro-democracy advocacy group, the amount of cash invested by Western pension funds and other institutional investors in China has hit a record high in recent months.

It comes amid rising criticism in the West about China’s human rights record, including its brutal treatment of Uighur Muslims and its suppression of democracy campaigners in Hong Kong.


The report cites the Universities Superannuation Scheme (USS), one of the UK’s largest private pension schemes, and Legal & General, Britain’s biggest pensions manager, as two British firms with “problematic” investments in China.

It found that L&G’s China fund was previously investing UK pensions in Zhejiang Dahua Technology, which is alleged to produce facial recognition software for the Communist Party that detects the race of individuals and alerts the police when it identifies Uighur Muslims.

L&G has since divested from Zhejiang Dahua Technology.

Author(s): Simon Foy

Publication Date: 22 Sept 2021

Publication Site: Yahoo Finance