How USS works Every effort has been made to present accurate information. Members are advised to check with their employer and/or the USS guides to confirm.

How USS works

Every effort has been made to present accurate information. Members are advised to check with their employer and/or the USS guides to confirm their understanding before acting on any information given. This presentation may be recorded for training and audit purposes.

Presentation for USS membersEifion Morris APMI

Agenda

1

•How much will your pension be?

2

•Getting more out of USS

3

•Transfers in to USS

4

•Bereavement benefits

5

•When can I stop working?

6

•Scheme valuation

7

•Questions?

How much will your pension be?

The basics

Pension

Tax-free cash

Standard package

The calculation

1/80th Salary Pension

Pension 3 Tax-free cash

Each year your pension & tax-free cash are calculated and ‘banked’

Example

Pension calculation Pension for year Banked pension

Salary in year

£40,000 1/80 X £40,000 £500.00 £500.00

£42,000 1/80 X £42,000 £525.00 £1,025.00

£43,500 1/80 X £43,500 £543.75 £1568.75

£45,000 1/80 X £45,000 £562.50 £2131.25

TOTAL £2131.25 pa

We now need to add increases ‘revaluation’

What does ‘Revalued’ mean?

Pension calculated each year & ‘banked’

Increases applied to pension earned

Increases to official pensions USS increase

5% pa or less Increases matched

More than 5% pa but less than 15% pa 5% plus 50% of increases above 5%

More than 15% pa Overall ceiling of 10% pa

Example

Pension for year Inflation calculation Banked

pension

£500.00 £500.00 X 1 £500.00£525.00 (£500.00 X 1.02) + £525.00 £1,035.00£543.75 (£1,035.00 X 1.03) + £543.75 £1,609.80

£562.50 (£1,609.80 X 1.015) + £562.50 £2,196.45

TOTAL £2,196.45 pa

Tax-free cash of 3 X pension in addition

Getting more out of USS

Put more in to get more out

Revalued Benefits AVC

15% maximum £

Tax relief

Certainty

Tax-free cash

Long-term saving

Money purchase

Up to £40,000 pa

Tax relief

Flexibility

Tax-free cash

Long-term saving

Help from the tax man

• £100 from net pay

Pay

• £125

Invest • £125 (returns dependent on investment)

Retire

Help from the tax man

• £100 from net pay

Pay

• £166

Invest • £166 (returns dependent on investment)

Retire

Tax allowances

Annual Allowance• £40,000 pa• 1 year of service X salary of £168,420.00 pa• Plus Money Purchase AVC contributions

Lifetime Allowance• £1.25 million• Pension of £54,347 pa

Tax allowances

Added years modeller

Money Purchase AVC calculatorwww.pru.co.uk/uss

How to pay AVCs

• Use modeller on www.uss.co.uk

• Contact Pensions OfficeRevalued Benefits

• Contact Prudential directly• Telephone consultation• 0800 2346913

Money Purchase

Transferring benefits in to USS

Transfers in to USS

Transfer previous benefits to USS

Beneficial Club transfers• Two year time limit on transfers from the Public Sector• Treated as ‘Final Salary’ benefits

Transfer request form – www.uss.co.uk

Bereavement benefits

Benefits for your dependants

Life assurance of 3 x salary

Income protection• Spouse/dependant/civil partner• Children

Update your beneficiary details• Death benefit nomination form (3 x salary)• Registration of financial dependant form (dependant’s

pension)

Dependant’s pension – how much?

Pension earned in last

12 months

Multiplied by years until

age 65

Add to pension already earned

Then, it’s a % of that figure

Dependant’s pensions

Spouse/Civil Partner• 50% of projected pension

Children• 2 or more children 75% of projected

pension• 1 child 37.5% of projected pension

When can you stop working?

Normal retirement

Retirement at the Normal Pension Age applicable• No ‘early retirement’ reductions

NPA to increase in line with State Pension Ages• 1 October 2020 66 • 67 by 2036• 68 by 2046

Retirement before NPA will be classed as early retirement• but only in respect of service after any increase

Future increases to NPA - 66

100% 65

100% 96% 65

October 2020 NPA increases to 66

Early retirement

• Reductions apply for each year earlier than Normal Pension AgeOwn choice

• Until 1 October 2014 no reductions applyRedundancy

• Take some of your pension and keep working, reductions may applyFlexible retirement

• Income if your ability to work is limited by ill-healthIncapacity

retirement

Varying pension and cash

•less cash and higher pension

•More cash and lower pension

Vary the cash

•Multiply your pension by 20

•Add on tax-free cash

•Add on any Prudential AVCs

Maximum 25% of capital value

Scheme Valuation 2014

Valuation 2014

Full valuation in 2014 (3-yearly)

• Large deficit predicted• Valuation as at 31 March 2014 - results late

2014/early 2015• Potential benefit changes/contribution increases?

What next?

What next?

• Pensions office contacts

• Prudential www.pru.co.uk/uss0800 234 6913

• USS www.uss.co.ukPensions TV

Your questions

Benefits on leaving

More than 2 years service?Pension earned to leaving

date

Plus 3 X Pension as cash

Increases apply up to retirement

Less than 2 years service

Refund of your contributions (except salary

sacrifice) less tax and NI

Pension based on your contributions only

Options after leaving

Transfer out?

At any time

To any UK and many overseas schemes

Full value of benefits

Draw at retirement

Plus deferred pension increases

from leaving to retirement

Rejoin?

Re-link to earlier membership and add to deferred pension