Your USS Journey. Presentation for USS members. Eifion Morris APMI

Transcription

1 Your USS Journey Presentation for USS members Eifion Morris APMI 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.

2 Agenda 1 How much will your pension be? 2 Getting more out of USS 3 Tax relief limits 4 Other benefits 5 What if you leave? 6 When can I stop working? 7 Questions?

3 How much will your pension be?

4 The basics

5 The calculation

6 Part-time calculation Salary 000s years 3 years 10 years 5 years 100% 30% 100% 50% Years

7 What will I get? Full-time member Years service Pension as % of salary % 19% 25% 31% 38% 44% 50% 56% If salary was 40,000 with 30 years service benefits:- Pension of 30/80 X 40,000 = 15,000 pa PLUS Tax-free cash of 3 X Pension = 45,000

8 How big will your pension be? Average service 32 years X 1/80th Average pension 16,800 pa Average salary 42,000 pa

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10 Getting more out of USS

11 Put more in to get more out Added years Money purchase 15% maximum Tax relief Certainty Tax-free cash Long-term saving Up to 50,000 pa Tax relief Flexibility Tax-free cash Long-term saving

12 Help from the tax man 100 from net pay 125 Invest 125 (returns dependent on investment) Pay Retire

13 Help from the tax man 100 from net pay 166 Invest 166 (returns dependent on investment) Pay Retire

14 Tax allowances Annual Allowance 50,000 pa 40,000 pa wef April 2014 Lifetime Allowance 1.5 million 1.25 million wef April 2014

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16 USS tax options

17 Added years modeller

18 Money Purchase AVC calculator

19 How to pay AVCs Added Years Use modeller on Contact Pensions Office Money Purchase Contact Prudential directly Telephone consultation

20 Other benefits

21 Transfers in to USS Transfer previous benefits to USS Beneficial Club transfers Two year time limit on transfers from the Public Sector Transfer request form

22 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)

23 What if you leave?

24 Benefits on leaving More than 2 years service? Pension = Service/80 X final pensionable salary 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

25 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? Final salary section if within 30 months and benefits left in USS Re-link earlier membership

26 When can you stop working?

27 Normal retirement Retirement at the Normal Pension Age applicable No early retirement reductions NPA to increase in line with State Pension Ages 1 October timetable to be announced for increase to State Pension Ages Retirement before NPA will be classed as early retirement but only in respect of service after any increase

28 Future increases to NPA % % 96% 65 October 2020 NPA increases to 66

29 Early retirement Own choice Employer consent from 60 Redundancy Reductions apply for each year earlier than Normal Pension Age Pre October 2011 benefits in full All benefits in full if 55 or more on 1 October 2011 Until 1 October 2014 no reductions apply Severance Benefits in full Flexible retirement Incapacity retirement Take some of your pension and keep working, reductions may apply Income if your ability to work is limited by illhealth

30 Flexible retirement Flexible retirement from age 55 Subject to consent of employer and USS 2 months notice required by USS 2 Flexes possible, 3 rd is full retirement Hours must reduce by at least 20% Draw up to 80% of benefits (minimum 20%) Early retirement reductions apply before age 60 You continue to build up benefits If you flex, you continue to build up further benefits on a part-time basis and remaining benefits based on future full-time equivalent pensionable salary

31 Incapacity retirement Total incapacity Pension based on service to 65 Partial incapacity Pension based on service already earned

32 Varying pension and cash Vary the cash No cash and higher pension Higher cash and lower pension Maximum 25% of capital value Multiply your pension by 20 Add on tax-free cash Add on any Prudential AVCs

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34 What next?

35 What next? Pensions office contacts Prudential USS website Slides available here Pensions TV

36 Your questions

37 Money Purchase AVC fund early exit charge Year of withdrawal % of fund withdrawn During Year 1 15% During Year 2 10% During Year 3 8% During Year 4 6% During Year 5 5% During Year 6 onwards No charge

38 Pension increases In line with Official pensions Civil Service, NHS, Teaching etc Consumer Price Index used as measure of inflation Benefits earned before 1 October 2011 no cap Benefits since 1 October 2011 capped Service before 1 October 2011 Since 1 October 2011 Matches official pensions with no cap Matches up to 5% 5% plus 50% of increases above 5% Overall ceiling of 10% pa

39 Pensionable Salary Calculated in most favourable way Based on last 13 years salary history All salaries indexed by RPI Better of: Best 12 months in last 36, or Best average over 3 years falling in last 13 years

40 Pensionable salary calculation Year Salary RPI increase Revalued salary Retirement X 193.5/193.5 = X 193.5/188.6 = X 193.5/182.6 = X 193.5/177.9 = X 193.5/174.3 = X 193.5/171.6 = X 193.5/166.5 = X 193.5/164.5 = X 193.5/159.5 = X 193.5/153.8 = X 193.5/149.8 = X 193.5/145.2 = X 193.5/ = Back