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Some Implications Of Capping The Inflation Indexation Of USS Pensions

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  • Russell, Bill

Abstract

On 1 October 2011 the Universities Superannuation Scheme (USS) substantially reduced the pension entitlements of its members. The most onerous of the changes is the cap placed on the indexation of pensions where in the event of high inflation the cap will quickly lower the real value of the pension. This paper quantifies the impact of the inflation cap and high inflation on the real value of the member’s pension and the concomitant impact on the USS and universities.

Suggested Citation

  • Russell, Bill, 2012. "Some Implications Of Capping The Inflation Indexation Of USS Pensions," SIRE Discussion Papers 2012-37, Scottish Institute for Research in Economics (SIRE).
    • Handle: RePEc:edn:sirdps:376
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    File URL: http://hdl.handle.net/10943/376
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    References listed on IDEAS

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    1. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 255-283.
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    3. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
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    More about this item

    Keywords

    pensions; superannuation; USS;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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