Published: 9th February, 2018
In this post, Sean Wallis locates three causes of the USS pensions ‘crisis’. First, the 2014 Pensions Act, which allows employers to prioritise their own growth over funding of their pension scheme. Second, quantitative easing, which means that the yield on government securities (which are supposedly less risky than equities) is extremely low — not even enough to cover inflation. Third, the Higher Education and Research Act (and its precursors), which unleased fearsome competition for students: universities are desperate to minimise their declared liabilities (such as a secure pension scheme for their employees) so they were more able to borrow money on the captial markets to fund their competitive ambitions.
This is a crisis Made in Westminster — and the solution lies in ministers’ hands.