Pensions: preempt the Treasury

四月 21, 2000

The USS is bloated with money for two reasons: the unanticipated decline in academic pay has caused a corresponding fall in actuarial liability for the USS, and because whenever a USS member moves to another retirement scheme, the USS pension entitlement goes up in line with inflation. That is a very uncompetitive return on one's investment compared with my previous pension contributions with TIAA-CREF, the main United States academic pension fund, which has risen in line with the stock market.

Other company pension schemes give their members a contributions holiday when they find that they have more funds than are needed to cover their liabilities. Probably the USS should do the same.

I only wish they would also switch to the defined-contribution model, which is much fairer and more transparent.

Paul Goldberg, Department of computer science, University of Warwick

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