A pension scheme has called for funds to be given more flexibility with accounting rules so as to assess the internal solvency of their funds.

The call - made by the Universities Superannuation Scheme (USS) during an evidence session at the Kay Review into long-term investment before a Department for Business, Innovation and Skills (BIS) select committee - was made by USS chief executive Roger Gray, Investment & Pensions Europe reported.

Gray had been asked by MP Adrian Bailey whether the shift from equity towards derisking might have been prevented through a better regulatory environment, that was more informed and aware of the long-term needs of investors.

Gray said that it was an important consideration to look at issues apart from deficits and overall returns, referring to a fund's ability to also cover ongoing costs through investments.

'Movements in the direction of allowing pension funds to look very carefully at "these are our assets, these are our liabilities - we believe we are doing alright against them, although the markets don't necessarily agree on a snapshot basis" seems to me to be an important dimension of flexibility to get into the system,' he told the committee, adding, that the world is 'a very complicated place, and there is real risk out there'.