Raising tuition fees to help plug the Universities Superannuation Scheme’s £17.5bn deficit would “take intergenerational unfairness to a new level”.

The publication of the USS’ annual report and accounts revealed it has seen its deficit increase from £8.5bn in 2016 to £17.5bn, with a funding level of 77 per cent compared to 85 per cent last year. It is an increase of £9bn in a year and it now has the largest deficit of any other UK pension fund.

As a result, there has been suggestions that the deficit will need to be plugged by raising student tuition fees, among other suggestions such as raising contributions, or cutting future pay-outs. However, Aegon pensions director Steven Cameron that increasing student tuition fees would be in direct conflict with the government’s desire to create intergenerational fairness.

“Gold plated defined benefit schemes are rarely open to those joining today’s private sector workforce, but the funding shortfalls of many existing schemes are having wide reaching implications which can pass down through the generations. Employees are now much more likely to be offered membership of a defined contribution scheme, but employers struggling to shrink defined benefit scheme deficits will be less inclined to offer more generous contributions above the automatic enrolment minimum to new employees," he said.

“The suggestion that universities may need to increase the tuition fees for today’s students to fund the huge pension shortfall takes intergenerational unfairness to a new level. Saddling our future workforce with even greater student debt to make good on pension promises offered to previous generations is a case of ‘robbing grandson Peter to pay grandpa Paul’.

“Some joining the workforce with significant student debt, facing high interest rates, may be tempted to save on their pension contributions by opting out of their employer’s pension scheme. But this only perpetuates the problem as not only do they lose out on valuable employer contributions, it is contributions paid while younger that have longest to grow to fund more in retirement.”

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