Better pensions cost money

Alastair McDougall (THES, August 21) has some interesting ideas. The Association of University Teachers and the corporate trustee both agree with him in attaching importance to improvement of the rate at which pensions accrue in the Universities Superannuation Scheme. The difficulty, however, which Mr McDougall touches on but does not fully confront, is that significantly better pensions cost money - lots of it.

Even having the same pension, only having it earlier, will not just cost a great deal in somebody's pension contribution, but will also reduce the lifetime amount that most staff get for their service from the aggregate of salary and pension. The eventual savings found by paying earlier the costs universities now meet at the time some staff retire on pension in their 50s would be eclipsed by the extra cost resulting from everybody taking full pension then.

As for structuring a pension scheme on a cafeteria basis, some greater flexibility is on the way, yet one important limitation is the difficulty many universities already experience giving accurate information about the relatively simple choices that USS offers now. The sector needs a "mis-selling" scandal like a hole in the head. What it needs is gimmick-free commitment to the importance of funding retirement income better.

Bill Trythall

University of York

AUT-appointed director of the corporate trustee of USS