Wednesday 29 May 2019
To the Fellows of Trinity College, Cambridge
As Fellows of Trinity College, you are aware that your Council, in its capacity as the College’s governing body, has voted to leave the USS pension scheme. I am writing in my capacity as General Secretary Elect of the University and College Union, because the Council’s decision has become a matter of national rather than local significance. You deserve to know exactly what is at stake.
People often speak about the need for different institutions in the Higher Education sector to stand in solidarity with one another. In this case, a small act of solidarity would make a massive material difference for all of us, including you. We have learnt in the last few days that Trinity’s departure gives USS a pretext to downgrade its assessment of the ‘employer covenant’. The practical consequence of this is that if one more similar employer leaves, the Scheme will demand higher contributions from those who remain, or significant cuts in the benefits promised to members.
You have a stark choice. Overturn your Council, or let it threaten the sustainability of the largest private pension scheme in the country: a scheme that provides a good, guaranteed retirement income for you and hundreds of thousands of your colleagues.
Your College will not benefit from the decision to exit. There is no plausible scenario in which USS will need to call on Trinity’s assets. In fact, Trinity’s £1.4bn endowment faces more risk of being wiped out by sudden, unexpected economic downturns and other adverse changes than USS’s globally diversified, £64bn fund, which is backed by many more sponsors, including the universities of Oxford and Cambridge. The reports commissioned by the Council so far are incoherent, inadequate, and often inaccurate. They have not explained or weighed up the risks that actually face the College and the Scheme. You have not been given the kind of expert advice you need if you are to evaluate the Council’s plans properly.
The sum which Trinity is expected to pay to leave USS – thirty million pounds – is a waste. It includes a very large insurance premium. It is twice as much as the amount that would be due to Trinity’s pensioners if the College remained in the Scheme, even on the overly cautious assessment of the liabilities that has been roundly criticised by the Joint Expert Panel (JEP).
The waste of the College’s money will not be the only detrimental effect. As Fellows, you will almost certainly suffer personal losses. If you move to a smaller, College-specific scheme, its trustees and sponsor will encounter far fewer obstacles to reducing Fellows’ benefits than USS employers do at present.
The events of the last 18 months have taught us all the value of sticking together. As a Union, we protected our pension scheme last year by going on strike. Members of your College joined us on the picket lines, from the New Museums to West Road and Sidgwick Avenue. Students occupied the Old Schools, met with the Vice Chancellor, and successfully pressed him to change the University’s position on the USS valuation. If we had not acted, all of us would already be on a vastly inferior ‘Defined Contribution’ scheme. We cannot forget the value of collective action in defense of institutions like USS, that bind our sector together and guarantee a good standard of living for university staff, no matter where they work.
Hundreds of Cambridge academics have already threatened and UCU’s Congress has just resolved that if the College does proceed to sever itself from the rest of the sector, you will be on the receiving end of a boycott. This boycott will target your dependence on the rest of Cambridge and the wider academic community. Along with many other UCU Congress delegates, I voted to make that boycott UCU’s official policy and will pursue it vigorously as General Secretary. Do not let your Council hurt your students and your research by continuing on its current course of action.
My understanding is that at the time of writing, you may still be able to call a meeting of enough Fellows to reverse the Council’s decision, or take other measures against its poorly-informed, irresponsible, and destructive choice. In the meantime, please email me if you have any questions about the decision your Council is taking, or about the Union’s policy regarding USS and your College.
Please do whatever you can in the time you have left.
Dr Jo Grady
General Secretary Elect
University and College Union