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I'm not exactly sure what the GP was talking about, but if the pension benefits are guaranteed and greater than the return on funds invested in the pension, the

by e40 4y ago

I'm not exactly sure what the GP was talking about, but if the pension benefits are guaranteed and greater than the return on funds invested in the pension, then the only way the pension plan could be sustainable would be in some growth scenarios. In many growth scenarios, though, it wouldn't be. This a problem with many public sector pension plans. Many cities across this country have pension plans that guarantee pensioners income that cannot be paid from the plan without screwing over future retirees. Clearly this issue has to be evaluated system by system.

pmyteh 4y ago
Oh yes, absolutely. This particular scheme is very heavily pre-funded (currently to ~30% of salary, which is why many employers want it dead) and is sustainable as long as your investment strategy isn't 'putting the money under the mattress'. Yes, residual investment risk falls on the universities collectively (by deliberate scheme design) but it's certainly not one of the over-promised schemes of the kind you note. In fact, it's status as a nominally private-sector scheme subjects it to heavy regulation specifically to ensure that the government doesn't get left holding the bag. If you want far more detail than is sane, there was a 'Joint Expert Panel' set up by the employers organisation and the union to provide a way forward after the industrial action caused by the last attempt to abolish the scheme. Their report analyses USS in detail (rather than pension schemes in general) and is at https://web.archive.org/web/20220506092908/https://ussjep.org.uk/files/2019/12/JEP2-Final-Report.pdf https://web.archive.org/web/20220506092908/https://ussjep.or...