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As an actuary, I take some interest in pensions. According to its annual report for the year ended March 31, 2004, the Universities Superannuation Scheme had more than 80 per cent of its funds invested in equities. It also had little (as a proportion of total assets) in index-linked government stock.

I feel the investment policy being pursued is excessively risky, bearing in mind the possibility of wind-up if, for example, public sector final-salary schemes are replaced by average-salary plans, as it would then be clear that the USS was overgenerous relative to public sector schemes.

Another problem for final-salary schemes is the Pension Protection Fund (in the Pensions Bill), which is likely to lead to payments from final-salary schemes in respect of deficiencies in schemes that are (already) insolvent.

William F. Scott
Edinburgh