Why USS’s Test 1 is not too risky and how Test 2 should be changed
Michael Otsuka

Michael makes the point that my concern about there not being enough money 1 time in 20 to pay all promised USS pensions is unfounded because there will always be universities around in the future to make good any shortfall. As a matter of logic Michael is right — if you assume there are always universities around with the ability to fill pension holes there is nothing to worry about — ever. But under Test 1 the 1 in 20 event only comes about after universities have made extra payments judged today to be at the limit of their ability to support the scheme. In the light of that the assumption they can always put in a bit more is perhaps a bit optimistic.