Britain’s largest pension fund plunges by £20bn: Universities Superannuation Scheme misplaced greater than a fifth of its worth after bond rout pummelled investments

The worth of Britain’s largest pension fund has plunged by £20 billion, greater than a fifth of its total worth, after turmoil in monetary markets pummelled its investments.

The Universities Superannuation Scheme (USS) takes care of the pensions of 460,000 greater training staff, previous and current.

It is considered one of few remaining outlined profit (DB) schemes nonetheless open to new joiners – paying a pension based mostly on a member’s closing wage.

Flawed: Liz Truss and Kwasi Kwarteng's mini-Budget sparked financial chaos

Flawed: Liz Truss and Kwasi Kwarteng’s mini-Budget sparked monetary chaos

These funds had been wrongfooted when ex-Chancellor Kwasi Kwarteng’s disastrous ‘mini-Budget’ brought about an enormous sell-off in Government bonds that uncovered hidden borrowing within the pensions system.

Latest figures from the USS present its belongings plunged from £92.2 billion to £72.6 billion within the 9 months to the tip of September – the largest fall in absolute phrases reported up to now by any office pension scheme. 

That interval included the week that adopted Kwarteng’s speech, when Liz Truss was Prime Minister. USS blamed the rout on falling fairness and bond markets. 

But pensions skilled John Ralfe mentioned he was ‘suspicious’ about whether or not that was your entire cause.

He famous the scheme’s excessive publicity to illiquid belongings reminiscent of personal fairness, ‘which persons are overvaluing’.

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It has additionally emerged that USS paid six employees no less than £1 million every final 12 months. The highest paid, thought to be chief funding officer Simon Pilcher, obtained up to £2.5 million.

Ralfe mentioned: ‘This simply seems to be improper when future pension advantages for USS members are being in the reduction of.’

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