How Much Risk is the USS Taking?

We analyse the probability distribution of outcomes for the USS in the light of conflicting claims about its sustainability in the absence of changes in contributions or in benefits. We find that a substantial investment in riskier assets (equities) makes the average outcome one in which the scheme is comfortably able to pay accrued benefits. But the risk of having far fewer funds than needed to pay existing pension promises is significant and the chances of large deficits is very substantial. It is neither the case that the scheme is comfortably able to pay pensions nor is it the case that the scheme is clearly unable to fulfill existing pension promises. But the current stock of assets is almost certainly insufficient to make the risk small of not having enough to pay pensions already promised. It seems that there are insufficient funds to make the probability of running out of money a very unlikely event. This is almost certainly not acceptable to those who would face the consequences of this significant risk arising. We briefly consider the implications of this.