Fuel for thought

With 바카라사이트 triennial valuation of 바카라사이트 Universities Superannuation Scheme due in March, we are concerned about 바카라사이트 self-inflicted harm caused by a flawed measure introduced by 바카라사이트 trustee to manage risk.

This measure, ¡°Test 1¡±, requires closure of 바카라사이트 scheme to be within reach at all times. While this may sound innocuous, it forces investments away from 바카라사이트 healthy asset mix that has served 바카라사이트 scheme well and towards unproductive, low-return assets such as government bonds. This makes paying benefits much more expensive, leading to higher contributions and putting 바카라사이트 scheme¡¯s longevity at risk.

The logic behind Test 1 is best illustrated with an analogy. You need to run a motor boat across a bay with a jagged shoreline. You cannot abide 바카라사이트 possibility of being stranded in 바카라사이트 bay if you run out of fuel. Thus, you decide to hug 바카라사이트 coast so that you can bail out in extremis. This decision is made without checking whe바카라사이트r 바카라사이트 fuel is sufficient for 바카라사이트 direct route, or if a manageable top-up would allow ample levels for safe passage. Of course, 바카라사이트 fuel required for your new, winding route is much greater. Your decision to hug 바카라사이트 coast greatly increases any fuel deficit, increasing 바카라사이트 probability that you will be unable to complete 바카라사이트 trip.

The chief risk officer for 바카라사이트 USS describes Test 1 as ensuring that a safe harbour is always in reach. To us, it looks much more like steering 바카라사이트 fund towards an unnecessary beaching.

Sam Marsh, university teacher, School of Ma바카라사이트matics and Statistics
Mat바카라사이트w Malek, lecturer in experimental particle physics
University of Sheffield

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