Is it time to break up the USS?

An interesting take on the situation, and one that has some points that both 'sides' will no doubt be fighting over for years to come. As one who refused to transfer into USS, the loss of years penalty (8 for 1) at the time was too much to stomach, I'm almost a disinterested observer save the fact whatever happens to USS is then translated onto our local non-academic scheme, all in the interests of 'equality' apparently. As such almost every University employee , except those high enough up the greasy pole to have their own privately managed pensions outside of academia, works on the understanding that their pension is a deferred form of pay, which helps make up for the shortfall in salary compared with our industrial comparators. As such my pay was already 20% below those in industry before the banking collapse, I don't consider the 'charitable sector' to be a comparator to the high tech sector I work in though the humanities might, with year on year pay rises below inflation making the shortfall even worse. Defined benefits at least enables people to plan for retirement, perhaps the real aim of defined contributions is to drive people away from employer provided pensions into the hands of the 'pensions industry' with two 'benefits', no pensions liabilities for the employer and increased profitability for the pensions industry. For those that don't understand just how out of control things are likely to become if the whole pensions issue isn't resolved with care I suggest reading up on whats known as the Illinois 'Edgar ramp'.

"For example, if they are so confident about returns and less worried about risks than the employer side, why are they so sceptical of defined contribution pensions, which put the risks and rewards on members?" This makes no sense - the whole point of a fund like a pension, the reason we don't just put money into a savings account - is that by pooling resources we are more able to withstand adverse conditions than as individuals. The bigger the pooling the better able to withstand shocks. In bad times, a collective pension scheme might struggle. Times might be hard, belts might have to be tightened, but everyone suffers together. With indeviduals taking the risks, people can be entirely wiped out. If you retire right at the worst point you could be entirely unable to buy an annuity and effectively be completely wiped out. But a large collective pension scheme can smooth over this, spreading the pain across many individuals and across time and yes to the employer as well as the employee. In the USS the employer takes a large amount of the risk and the individual also takes some, in a normal scheme the individual takes all the risk. The joint covenant works for the same reason insurance or health services work - because no one knows who might get into trouble, and we support each other. Of course there are some we know likely won't fail (e.g. Oxbridge), luckily for us those institutions are still ultimately ruled by their fellowships rather than professional management, than those fellowships see their duty as primarily towards the wider scholarly community first, and their institutions only second.

No.