Thread by @MikeOtsuka

"Leaked: Trinity has voted to leave the UK pensions scheme. If two employers exit, staff pensions may be in uncharted territory." Comments below. 1/
varsity.co.uk/news/17530

In addition to the announcement that Trinity will be buying out its past DB liabilities & leaving the #USS pension scheme, this excerpt from a letter from Bill Galvin to @AlistairJarvis provides the most significant revelation👇. 2/

This linked #USS note👇, also dated 7 May, which @USSEmployers released on 9 May, makes vague reference to the yellow-highlighted above, in the blue-highlighted passage below. 3/
ussemployers.org.uk/sites/default/…

From a purely self-interested point of view, Trinity's decision to leave #USS might make sense, given the extent to which their assets exceed the benefits they receive from #USS. This displays a high degree of risk-aversion, but perhaps not irrationally high. 4/

Given its extremely high cost, there are very few other higher education institutions for whom it would make sense to buy out their DB liabilities in order to exit USS, which they are able to do under existing rules. 5/

A number of other higher education institutions, such as Oxford and Cambridge Universities, have explored this option and come to the conclusion that the cost of buying out their liabilities would be far too great to justify the expense. 6/

Perhaps another unusually wealthy Oxbridge College might be tempted. All Souls & Nuffield have been mentioned as perhaps in a similar position to Trinity, though my understanding is that at least Nuffield has absolutely no desire to do so. 7/

In any event, my understanding is that the blue-highlighted clarification of the rules👇would make it clear that USS has discretionary power to block an employer from leaving the scheme in the event that this would lead to a downgrading of covenant strength. 8/

It would be good to receive confirmation from #USS regarding the nature & effect of this clarification. Perhaps @noellachye -- the superb @VarsityUK reporter who has broken a number of significant #USS stories -- might be able to help shed light? 9/9