Cambridge UCU naturally regrets the decision made by Trinity College Council to leave USS – but not because it will make a significant difference the strength to the employer covenant or undermine USS’s financial position. As Trinity acknowledge, and has been reiterated by multiple authorities – USS, the Joint Expert Panel convened as a result of the 2018 strike, actuarial advisers of all key stakeholders – USS is in a sound financial position, and is far from needing to call on employers to pay pensions as they become due.
The support Trinity would provide to the Scheme should it require additional contributions is easy to overstate, since these contributions would be made as a percentage of USS employees’ salaries rather than in proportion to each employers’ ability to pay. Trinity is a very small USS employer (c. 100 staff enrolled on USS, as of 2011), so would only be called on to cover a significant proportion of a funding shortfall if almost all other pre-1992 HE institutions were driven into bankruptcy. This doomsday scenario is vanishingly unlikely.
Trinity’s decision to withdraw from USS is all the more regrettable because as well as showing a dismaying lack of solidarity with the rest of the sector and denying its own employees the benefits of USS membership, it does not serve the College’s interests. Trinity will have to pay around £30m to leave USS, based on its liabilities under the very pessimistic 2018 valuation of the Scheme, and it will do so to escape a risk that is purely notional. This irrational extravagance is made possible only by Trinity’s unique combination of millions in ready cash and a very small USS-enrolled workforce.
Leaving USS is therefore unlikely to be attractive – or even possible – for other employers, who have less money and would face a much larger exit fee. More importantly, though, we do not believe any employer leaving USS is in anyone’s interests. After last year’s strikes, employers know how important decent pension provision is to university staff. They should stand together to underpin USS, a well-designed collective scheme which, if properly supported and run, is well able to sustainably provide decent pensions for all its members at a reasonable cost.
— Cambridge UCU Branch Committee, 20 May 2019