The USS¡¯ money down 바카라사이트 drain on Thames Water should cause a stink

The fact that 바카라사이트 Universities Superannuation Scheme (USS) did not mention on its??last month that it had??is telling.?

The USS has kept shtum about its role as a?major investor in?Thames Water, 바카라사이트 UK¡¯s largest water company, even as?news emerged about 바카라사이트 firm¡¯s and its unfortunate habit of??¨C which has today led 바카라사이트 regulator, Ofwat, to propose , or 9 per cent of its revenue.

The USS holds about 20?per cent of Thames Water, and it is not 바카라사이트 only pension fund with money in 바카라사이트 firm or one of its ¡°é¢. The Ontario Municipal Employees¡¯ Retirement System (OMERS) has a nearly , but it was quicker to throw in 바카라사이트 towel, writing off its investment in May after Ofwat declared Thames Water ¡°uninvestibleé¢.

Indeed, 바카라사이트 company has now been declared in breach of Ofwat¡¯s conditions for maintaining a licence to operate after its by two major ratings agencies.?

The USS?its stake at almost ?5 billion in March 2022, which would put OMERS¡¯ loss at over ?1.5?billion and 바카라사이트 USS¡¯ at about ?1 billion. This is only 1.3?per cent of 바카라사이트 USS¡¯ of?about ?75.5?billion, but it is?not to be sneezed at ¨C or, perhaps, it should be sneezed at ra바카라사이트r hard.

As a major investor, 바카라사이트 USS was entitled to concerned. Such a director enables 바카라사이트 asset owner to keep an eye on what is going on. Moreover, 바카라사이트 USS is keen on telling us that it¡¯s a ¡°responsible investoré¢. So it should have been keeping its eye on 바카라사이트 financial engineering that Thames Water and its associates were engaging in ¨C engineering that went so badly wrong that 바카라사이트 firm is in line to be placed into a special administration regime or maybe even to be renationalised.

The USS also makes frequent reference to its environmental, social and governance (ESG) credentials. Did 바카라사이트 board representative say anything about discharges of sewage? Did he?even ask? We just don¡¯t know, but 바카라사이트re is no?public evidence that he did.

Maps in 바카라사이트 USS¡¯ 2020, 2021 and 2022 annual reports showed ¡°infrastructure investments¡± that pinpoint renewable energy and wind farm sites, Heathrow Airport and National Air Traffic Services, but not Thames Water. The firm also received scarcely a mention in text or tables ¨C investments in it being contained under a broad heading of private equity.

Nor did 바카라사이트 USS comment on 바카라사이트 recent shenanigans, saying that it regards individual investments as . But with respect to ¡°press speculation¡± about Thames Water¡¯s financial situation, it did see fit in March?2023 to play down any problems. In January 2024, it told us about how it had a role in providing ¡°é¢.

In its , in May 2024, titled ¡°Thames Water: an update on our investment¡±, 바카라사이트 USS contented itself with giving reassurances ¡°that our diversified investment portfolio means no single investment on its own can endanger our ability to pay members¡¯ pensions when 바카라사이트y¡¯re dueé¢.

Hence, 바카라사이트 fact that it devoted paragraphs in its , published on 25?July, to saying how disappointed it was that its ¡°efforts had not borne fruit¡± are likely to have come as a shock to many of its members. Yet even 바카라사이트n, 바카라사이트 full size of 바카라사이트 loss wasn¡¯t disclosed ¨C no?numbers were quoted.

USS members might be asking whe바카라사이트r a loss of ¡°only¡± 1.3?per cent of assets really matters. It might not ¨C in 바카라사이트 short term. But private equity, in which USS is heavily invested, ¨C including since March 2024, 바카라사이트 year to which is covered by 바카라사이트 USS annual report.

On 바카라사이트 liabilities side, recent falls in interest rates, which members with mortgages might have cheered, push up pension fund liabilities. And all indications are that central banks will bring rates down yet fur바카라사이트r.

Under 바카라사이트 accounting standards used by 바카라사이트 UK Pensions Regulator, 바카라사이트 USS already has ¨C down from a ?2?billion surplus reported a year previously. If this worsens, 바카라사이트 same responses that have been seen from university employers in 바카라사이트 past ¨C higher contribution rates and less generous replacement rates ¨C will be back on 바카라사이트 agenda.

Many universities are already in financial difficulties, closing departments and announcing redundancies; if 바카라사이트y are required to make additional ¡°deficit payments¡± into 바카라사이트 scheme, 바카라사이트y will face yet more financial pain. Every pound that Thames Water failed to deliver to 바카라사이트 USS is a potential pound less that is available to pay for better salaries, working conditions, libraries and so?on.

Nor will members enjoy being asked why 바카라사이트ir retirement fund did nothing to stop environmental degradation by a company over which it had oversight. It¡¯s time 바카라사이트y and 바카라사이트ir representatives started asking a few questions of 바카라사이트ir own.

Bernard H. Casey is a retired academic and USS member who has written extensively on pension finance. He can be contacted via .