More than 1000 academics have called for an urgent inquiry into the governance of the university sector’s £60bn retirement fund after a whistleblower claimed she was blocked from probing the size of the scheme’s deficit.

In a letter to the Financial Times, academics said parliament or a select committee should investigate estimates made by the University Superannuation Scheme (USS) — the UK’s largest private sector pension — of the size of its deficit and the conduct of its executive, trustees and the Pensions Regulator.

The academics said in the letter: “We believe the conduct of USS valuation over the past two years has brought the scheme into disrepute.


“An inquiry is urgently needed to obtain the necessary information to assess the USS’s claims, review the conduct of the USS executive, Trustees and the Pensions Regulator, and ultimately to rebuild members’ and employers’ trust and confidence in the scheme.” It added that “it would be appropriate for a select committee of parliament to investigate”.

Signatories to the letter include David Spiegelhalter, president of the Royal Statistical Society and a Cambridge university professor, and 1,016 members of staff from universities across the UK.

They have thrown their weight behind Jane Hutton, a USS trustee who this month told the FT she was thwarted in her attempts to find out whether the pension scheme had exaggerated the size of its deficit, prompting a regulatory probe.

USS, which has 420,000 members, reported in November 2017 that it had a £7.5bn deficit based on actuarial rules, prompting Universities UK, the body which speaks for more than 350 higher education institutions, to propose phasing out their generous defined benefit pension in favour of a higher-risk defined contribution plan.

USS was forced to scale back that deficit to just £3.6bn this year after an independent panel reviewed its assumptions and concluded the position was not as bad as first thought.

Universities have now dropped plans to move to a defined contribution scheme but defined benefit scheme members and universities have been asked to raise their contributions.

Regulators probe claims about university pension plan
Ms Hutton claimed she had identified a calculation error in the “retirement rate” used to calculate the deficit in November 2017. She suspected the deficit had been “substantially overestimated” after scrutinising other assumptions including mortality and salaries.

She said her concerns were not immediately dealt with, a claim that is now being probed by the Pensions Regulator.

In the letter this week, academics demanded to know whether Ms Hutton’s concerns were addressed adequately and said the trustees and USS executive should be forced to resign if they were “unable to act in the interests of scheme members”.

In response, the USS said: “The trustee’s role is to ensure the valuable benefits promised by employers to our members are secure. We take independent advice and are rightly held accountable by regulators and the law.

“We always strive to uphold the highest standards of integrity in our governance and have worked very hard to accommodate the views of our employers and members against a challenging economic backdrop.”