To the Fellows of Trinity College:
In his justification for Trinity’s withdrawal from USS, the Bursar writes:
Trinity’s mission is to advance education, learning and research, by the maintenance and development of a College in the University and City of Cambridge. Support of the UK HEI sector as a whole is not formally within the College’s charitable object. As a responsible employer and as a charity, the Trustees have a duty to protect the College from risks and mitigate those as far as possible. By removing the LES [last employer standing] risk, the Trustees have helped ensure the College’s continued long-term existence as an academic institution and charity….
Even if “[s]upport of the UK HEI sector as a whole is not formally within the College’s charitable object”, it remains the case that Trinity’s mission is “to advance education, learning and research”. We therefore need to ask whether the advancement of education, learning and research is better served by the payment of £30 mn to withdraw from USS or by Trinity’s remaining within the scheme and returning £30 mn to the College’s endowment.
The College’s charitable object of the advancement of education, learning and research needn’t take place entirely within Trinity’s four walls. The College should welcome the fact that the research and scholarship of their Fellows advances research and learning beyond these walls. Moreover, the question of whether a portion of the College’s endowment is well spent in support of a given research project in, say, physics, is rightly sensitive to the extent to which this project advances research and learning in the world beyond Trinity.
It is therefore appropriate to take the effect on research and learning throughout the UK HEI sector and beyond into account in determining whether Trinity’s decision to withdraw best serves its mission “to advance education, learning and research”.
On the one hand, withdrawal provides insurance against a remote risk that Trinity will lose its entire endowment to USS as the last employer standing, which would severely curtail its ability “to advance education, learning and research”.
On the other hand, withdrawal from USS poses a real risk that education, learning, and research in the UK as a whole will be set back rather than advanced, since Trinity’s withdrawal makes a downgrading of the scheme’s covenant more likely. Such a downgrading would increase the cost of maintaining the pensions of university employees throughout UK higher education. This is money that could otherwise be spent on education, learning, and research.
Since neither of these harms is certain, we need to attend to the expected gains and losses to education, learning, and research.
The existential loss would be catastrophic. But its likelihood is remote.
The loss of funding for research and learning across UK HEI would also be great, in the event that the covenant is downgraded from “strong” to “tending to strong”. Moreover, the likelihood is relatively high that Trinity’s withdrawal from USS will lead to — or be a major part of a set of actions that gives rise to — a downgrading of the covenant.
Given the significant difference in the probabilities, it is reasonable to conclude that the expected setback of Trinity’s mission “to advance education, learning and research” will be greater if the College withdraws from USS than if it remains a member of the scheme.
I hope, in light of the above, that the Fellows might be persuaded that, even if one restricts one’s attention to nothing other than the College’s charitable object, there is a compelling case that Trinity should remain within USS.