Value for money matters at the best of times but, with rising inflation and conditions in financial markets making defined benefit pensions more expensive, it is more important than ever that we can demonstrate that USS is run in a cost-effective manner.
We held our annual Institutions’ Meeting at the Royal College of Physicians on Thursday 2 December 2021.
USS has been invested in Thames Water since 2017 and has just announced a further investment to take its shareholding to nearly 20%. Mike Powell, Head of Private Markets, explains why.
Passions are running high in the debate over UK university pensions. This is wholly understandable: pensions are an important influence on the financial security of members and their families and on the financial stability of many academic institutions. We all wish to provide the best possible outcome, but we must deal with the world as it is, not as we wish it would be.
USS announced its Net Zero ambitions in May this year. Simon Pilcher, CEO of the wholly-owned investment subsidiary, USS Investment Management, explains what has happened since.
As we have highlighted in the past, USS would be strongly opposed to proposals which could dilute key investor protections and shareholder rights and set a precedent which could lead to unintended consequences for investors in the UK market. USS calls for the retention of the UK’s listing rules on dual class voting structures and free float thresholds and that the principle of one-share, one-vote is protected.
We are currently holding a full valuation to establish how we plan to pay the benefits promised to our members over the coming decades. To the extent we plan to rely on uncertain investment returns, the process involves trying to predict how financial markets might perform over time.
Reflecting the long-term nature of the pension arrangements of our members, we take a long-term approach to investment strategy. The overall balance of our investments in the defined benefit (DB) section reflects the primary objective of any DB pension: to provide members with a set inflation-linked income for life in retirement, regardless of what happens to the economy in the future.
In early May, USS announced its first investment in solar energy. Mike Powell, Head of Private Markets, explains why renewable energy is a growing area of focus for investment.