The £67 billion Universities Superannuation Scheme (USS) – the UK’s largest private pension scheme by assets — said on Wednesday its funding deficit has more than doubled to £13 billion amid “enduring low interest rates.”

USS’s membership grew in 2019-20 by almost 20,000 from 439,572 to 459,714 — with 204,753 active members, 180,353 deferred, and 74,608 retired.

“Investment returns for the scheme’s DB (defined benefit) fund averaged 6.19% pa over the five years to 31 March 2020 (worth £17.4bn and 0.91% pa above benchmark),” said USS.

“According to the latest independent analysis, USS saves £49 million a year compared to its peers by managing most of its investments in-house.

“At 31 March 2020, total assets under management were £67.6bn (2019: £68.4bn).

“Its defined benefit (DB) fund stood at £66.5bn, while its defined contribution (DC) assets totalled £1.1bn.

“Market conditions at the reporting date had a significant impact on the price of the scheme’s DB pension promises.

“Enduring low interest rates pushed its estimated funding deficit to £12.9bn at 31 March (2019: £5.7 billion).”

USS group chief executive Bill Galvin said: “At 31 March 2020, Coronavirus was sweeping across the world and financial markets were hugely uncertain about the potential outcome.

“Our 2020 report outlines the position of the scheme against this challenging backdrop.

“Five-year investment performance was strong in absolute and relative terms, and we retained our cost advantage versus peers.

“Even before Covid-19, historically low interest rates, increased life expectancy, greater regulation, and volatile financial markets had already made promises of a set retirement income for life more expensive.

“The depth of the economic shock brought about by the pandemic has highlighted the long-term challenges facing open DB pension schemes like USS; challenges that we intend to work with our stakeholders – Universities UK and University and College Union – to address through the ongoing 2020 valuation.”