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

theguardian.com:

The financial market collapse at the start of 2020 was, on the face of it, a disaster for the world’s pension funds. The value of stocks and some bonds worth trillions of pounds plummeted as the extent and depth of the global recession caused by Covid lockdowns became clear. 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.

USS members come from more than 330 institutions, including the universities of Oxford, Cambridge, Manchester and Birmingham. Among them are some of the country’s best economists – and they are putting their knowledge to use in the tussle with the trustees.

All of which adds to the challenges faced by USS and its chief executive Bill Galvin.

“Clearly it’s regrettable that employers and unions are finding it difficult to agree the way forward right now,”