Cuts to the pensions of UK higher education staff were not a mistake despite the fact that they now look highly likely to be reversed after just two years, according to the chair of the Universities Superannuation Scheme (USS).
Confirming a “big turnaround” in the USS’ finances, Dame Kate Barker told reporters that it had had “no alternative” but to cut benefits and raise contributions in April last year as the much more favourable financial climate that has been the catalyst for the recovery had not been foreseen.
The USS trustee has released the funding assumptions being used in its all-important 2023 valuation, which confirm that the value of its assets has risen from £66.5 billion in 2020 to £73.1 billion.
Its technical provisions – the amount needed to fulfil pensions promises – has fallen from £80.6 billion to £65.7 billion in the same period, meaning a £14.1 billion deficit in 2020 has been wiped out and the scheme is now projected to have a £7.4 billion surplus.
