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Some Implications Of Capping The Inflation Indexation Of Uss Pensions

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  • Bill Russell

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

  • Bill Russell, 2011. "Some Implications Of Capping The Inflation Indexation Of Uss Pensions," Dundee Discussion Papers in Economics 261, Economic Studies, University of Dundee.
  • Handle: RePEc:dun:dpaper:261
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    File URL: http://www.dundee.ac.uk/media/dundeewebsite/economicstudies/documents/discussion/DDPE_261.pdf
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    References listed on IDEAS

    as
    1. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 255-283.
    2. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, Oxford University Press, vol. 97(4), pages 543-569.
    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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    pensions; superannuation; USS;

    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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