Two-hundred-and-fifty Cambridge academics have signed an open letter condemning a proposal from Trinity College to withdraw from the Universities Superannuation Scheme and to set up its own private pensions scheme.
In the letter organised by the University and College Union, academics are threatening not “to supervise Trinity students or to engage in other discretionary work in support of Trinity’s teaching and research activities” should Trinity decide to go ahead with this plan.
Like other Cambridge colleges, Trinity relies heavily on the teaching labour of staff and graduate students across the university – so a boycott will have serious effects. Waseem Yaqoob, a lecturer in the Faculty of History, fellow of Pembroke College and branch secretary of Cambridge UCU, told Pensions Expert: “Trinity must understand that they are part of a collegiate system that relies on the support of other members of staff. The potential damage caused by opting out of USS, aside from denying their own staff access to a much-valued portable pensions scheme, will have negative consequences much broader than the nominal financial risk in view.”
Because this decision may negatively impact university staff across the whole of the UK, we are also considering plans for a national grey list
Waseem Yaqoob, UCU
In response, a Trinity College spokesperson confirmed to Pensions Expert that the college is “reviewing pension arrangements for its academics; consultation is under way and any decisions will be taken after completion of this process”. A later update confirmed that the college will indeed cease accrual.
Senior Bursar at Trinity, Rory Landman, said: "This is not a decision taken lightly by the College Council. Following substantial legal and actuarial advice, and bearing in mind our responsibilities as Charity Trustees of Trinity, we believe leaving USS is in the best interests of the College. This decision also helps to ensure Trinity’s continued and substantial financial support to the whole of Collegiate Cambridge."
College emphasises weight of pensions burden
Trinity will have to pay around £30m to leave USS, according to the union, based on its liabilities under the very pessimistic 2018 valuation of the scheme. It adds: “Trinity will be sacrificing £30m from its endowment to buy out of USS, effectively reducing the college’s income by 1.5 per cent in perpetuity in order to avoid a risk that is purely nominal.”
There are 98 active members of USS at Trinity College – less than 0.05 per cent of USS’s total active membership. Cambridge UCU says: “Trinity’s withdrawal would undermine confidence in the scheme, and might encourage other wealthy employers with small USS liabilities to withdraw, with potentially disastrous effects for the scheme as a whole.”
Indeed, the USS trustee has received advice from PwC that “the risk of strong employers withdrawing from the scheme in future could see the covenant downgraded from ‘strong’ to ‘tending to strong’”, but a USS spokesperson emphasises that the college’s “proposed withdrawal would, in isolation, have no material impact on USS’s funding position or overall strength”.
USS trustee defends scheme
“As a multi-employer scheme backed by more than 340 institutions, USS has significant scale and strength, which brings several benefits to all of our sponsoring institutions along with our members in the form of lower investment management costs and the pooling of risk,” the spokesperson says.
“The trustee’s primary objective is to ensure the valuable benefits promised by USS are secure for all of our members and options for protecting the strength of the collective financial support offered by sponsoring employers are currently under consideration.”
Stormy times lie ahead for the university sector. Mr Yaqoob says: “We will do whatever we can to support the greylisting of the college for as long as it is necessary for it to change its course. Because this decision may negatively impact university staff across the whole of the UK, we are also considering plans for a national grey list.”
