Nick Hillman’s “USS trilogy” reviewed

HEPI (the higher educational policy group) has published three blogs on its website authored by Nick Hillman (pictured). The website hasn’t attracted much comment so I asked Con Keating to send me his.

“Idiosyncracy” as a euphemism.

When I accepted the invitation to review a series of blogs on the subject of USS posted on the Higher Education Policy Institute (HEPI) website, I recalled that the author, Nick Hillman, had form with USS having previously written, by his description “an idiosyncratic history of USS“. It lived up to that characterisation.

By his account, the inspiration for these blogs was his having just finished reading Roger Lowenstein’s book “When (Sic) America Aged”. I read “While America Aged” more than a decade ago, having bought the book at Kennedy airport while waiting for a red-eye flight. I found it turgid notwithstanding the sensationalist front cover sub-title:


The contrast with his earlier “When Genius Failed” was stark, but I suppose that knowing many of the protagonists in that tale of Long-Term Capital Management had given me a special interest there. Penguin first published this in April 2009. Surprising then that Hillman should only now have finished reading it and be inspired to write these blogs.

The tone for the blogs is set in the first sentence, which quotes

“the HE team at Research Professional declared: ‘The hole in the [USS] pension fund is now so large that something will have to give’ “ and adds: “Like many people, I agree.”

This left me wondering how many, if any, primary sources might have been considered or investigated.

A key paragraph in the second blog is this.

“The main lesson from Lowenstein’s book When (sic) America Aged, which prompted this series of blogs, is that areas that look like they are the only provider of something often turn out not to be.”

By this account then, the book is more about corporate sustainability than pensions. The paragraph continues:

”The big three US motorcar manufacturers, General Motors, Ford and Chrysler, found that consumers ‘could buy cars with pensions from GM, Ford and Chrysler––or cars without them from Toyota.’”

This is nonsensical. Toyota gained a foothold in the US by offering small, affordable cars with attractive fuel consumption to Americans in the wake of the fuel crisis. Pensions had little or nothing to do with it. In fact, the plants in japan then making these cars had life-time employment, with extremely attractive health care and DB pensions arrangements. Toyota’s plants subsequently opened in the US offered DB pensions to employees.

In the first of these blogs, we are asked to believe that meaningful lessons for USS may be drawn from the case of San Diego:

“This may all sound a long way from the challenges faced by UK universities in 2021 but it isn’t. The USS faces an astronomical deficit and, as Lowenstein shows, policymakers, managers and unions are often tempted to put tricky pension decisions off to another day.”

However, he subsequently and correctly points out in the third blog, that such behaviour would not pass muster with the UK’s Pensions Regulator as it

“will keep twisting their heads back to focus on the problems.”

Not great on consistency really.

IF I were to look for a lesson from San Diego, it would be that of their trustee whistle-blower, Diann Shipione and the similarities with USS’s whistle-blower, Jane Hutton. Shipione was persecuted, ridiculed, and came close to prosecution by a board involved in the gerrymandering of its structure, and rules, and gross abuse of process. There were subsequently successful federal prosecutions for securities fraud. She has been both fully vindicated and celebrated with many accolades.

We are treated to the extent of Nick Hillman’s expertise and insight into pensions with this:

“At heart, they are very simple. Money is set aside for later use. If there isn’t enough money to match any promises, then there are two options: put more money in or take less money out.”

Now that is not a simplification, it is a misrepresentation.

The third of the blogs contains a rambling account of the decline of DB provision which is far from news. The series is entirely predicated on Nick Hillman’s blind acceptance of the idea that USS has a deficit of £23.9 billion. He even tries to deflect criticism of that by issuing a challenge to his critics on that

“(To those shouting at me on social media in response to this series of blogs, including those who have claimed the USS deficit is entirely illusory, I would point out that it is the Regulator you need to convince of your case.)”

Now even that challenge is false; it would be sufficient to convince the trustees or UUK, long before any involvement of the Regulator. There is one improvement in this third blog, the title of Lowenstein’s book has been corrected.

There is much more in these blogs which does not bear close scrutiny, but it probably does not warrant the further time or effort either to expose those points, or to read them.

Shortly before ending the last blog, Nick Hillman offers a free plug for the recrudescent John Ralfe’s forthcoming lecture on CDC at Imperial College Business School and that tells us much about his following of dogmatic unfounded beliefs on DB pensions.

In the attempt to salvage something positive from this car-crash of blogs, let me suggest that they could serve in schools of journalism as a prime example of work that, when submitted by an undergraduate, could only be expected to deliver catastrophically bad appraisals.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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2 Responses to Nick Hillman’s “USS trilogy” reviewed

  1. Bob Compton says:

    Would it not be great if all “Fake News” could be put down as eloquently as Con has achieved here.

  2. ConKeating says:

    I have received the following comment on this blog in other correspondence on it

    “Yes, pensions are simple. You save money today, to get money when you retire. However, simplification hides a number of important details.

    First, it matters what you invest in. If you invest in assets that are expected to lose value over time, it will naturally be hard to afford a decent retirement.

    Second, all of the claims that Nick is discussing are estimates that come from statistical models that require assumptions. When these assumptions are changed, the amount of money you need changes.
    For example, Nick’s claim that the scheme has a deficit of £23.9bn is an estimate based on the assumption that the scheme will on average lose -0.7% each year. Whether the USS estimates and Nick’s claim are credible depends on whether you believe that this assumption – that the scheme will lose -0.7% of value every year for the next 30 years is plausible.

    Hence Nick’s simplification here is very misleading, it is not possible to compare a scheme’s assets (money in) with its liabilities (money out), with the degree of certainty that Nick is suggesting. He either knows this, and is being disingenuous, or does not know this and is poorly informed.”

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