UK - The Universities Superannuation Scheme's funding level dropped by 29 percentage points due to losses on investments, and increases in salaries and pensions, its 2009 accounts revealed.
The report said the decrease reflected the fund's actual investment performance over the year and changes in the valuations rate of interest and inflation assumptions - which in turn impacted on the salary and pension increase assumptions.
But it warned further deficits in the future may result in the scheme asking for higher contributions from its members.
The report said: "Surpluses or deficits which arise at future valuations may impact on the institution's future contribution commitment.
"A deficit may require additional funding in the form of higher contribution requirements, where a surplus could, perhaps, be used to similarly reduce contribution requirements."
Despite the investment losses, the scheme remained confident in its allocations to "risky" assets.
According to the report: "The trustee believes that over the long-term equity investment and investment in selected alternative asset classes will provide superior returns to other investment classes.
"The management structure and targets set are designed to give the fund a bias towards equities through portfolios that are diversified both geographically and by sector."
During the year, USS has been building in-house teams to target investments in alternatives.
Staff numbers increased from 44 at the start of this year to 57 at the end of March - mainly due to recruitment in its private equity team, the hire of a hedge fund manager and an in-house lawyer.
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