Magazine article The Times Higher Education Supplement : THE

Final Salary Pension for London Support Staff to Close

Magazine article The Times Higher Education Supplement : THE

Final Salary Pension for London Support Staff to Close

Article excerpt

Higher education's second-largest private pension provider is set to close its final salary scheme next year to help eliminate a multimillion-pound deficit.

The Superannuation Arrangements of the University of London (Saul), which has about 38,000 members, is taking the action because its deficit is predicted to soar to £310 million this year, up from just £75 million in 2011.

The fourfold increase in its deficit leaves the scheme, which is used by professional support and technical staff at colleges associated with the University of London, only 88 per cent funded, a consultation paper on the proposed changes says.

A similar rise in the deficit of the sector's largest pension provider, the Universities Superannuation Scheme, led to the closure of its final salary scheme. Both funds have blamed their larger deficits on the state of the financial markets rather than on their investment performance.

Saul's 10.3 per cent investment return over the past five years was "better than expected", a spokesman said, but its deficit had ballooned as liabilities had risen more sharply because of "low gilt yields and [because] people are living longer". …

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