UK – The Universities Superannuation Scheme, the UK’s second largest pension fund, has hit back at the Financial Times, saying a recent article in the paper contained a series of inaccuracies.
The paper on Tuesday reported that the fund was planning a huge shift away from equities. The fund is taking issue with what it calls the FT’s “strong language”.
It rejects the paper’s use of phrases such as "dire position", “enormous bet" and “financial fog" that peppered the near full-age item written by a well-known FT journalist.
“John Plender's article on the deficit in the Universities Superannuation Scheme …and the trustee company's decision to continue to invest heavily in equities makes a number of inaccurate statements and reaches conclusions that cannot go unchallenged,” wrote scheme actuary Edwin Topper.
Writing to the FT, he says: “In fact the article misrepresents the position for the scheme in question and also makes the mistake of applying John Ralfe's - former head of corporate finance at Boots - mantra of bonds, FRS17 and financial economics as if these are received wisdom applicable to all pension schemes at all times.”
Topper notes that USS is not required to comply with the FRS17 accounting approach and that it “benefits from a highly positive cashflow of £800m a year, a healthy influx of new members and a strong employer covenant”.
“Its actuarial assumptions are conservative. It can look long-term and did not take contribution holidays in the ‘good times’.
“The USS's investment strategy has been carefully thought through after considering the risks and rewards inherent in equities and alternative asset classes.”
USS said on its website that it is fully funded under the FRS17 measure.
It added: “As our independent actuary said last year, USS has ‘a funding strength which every other scheme in the land would envy.’”
Press representatives of the FT were not available.