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 Keep your house in order 4 What if you leave? 5 When can I stop working? 6 Questions?

3 How much will your pension be?

4 The basics

5 The calculation Each year your pension & tax-free cash are calculated and banked

6 What is salary? Your contributions each year (1 April to 31 March) Divided by the contribution rate (6.5%) Salary to work out pension

7 Working out the pension 2, % 40,000 pa 1/80th 40, pa

8 Example Pension calculation Pension for year Banked pension Salary in year 40,000 1/80 X 40, ,000 1/80 X 42, , ,500 1/80 X 43, ,000 1/80 X 45, TOTAL pa We now need to add increases revaluation

9 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

10 Example Pension for year Inflation calculation Banked pension X ( X 1.02) , ( 1, X 1.03) , ( 1, X 1.015) , TOTAL 2, pa Tax-free cash of 3 X pension in addition

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12 Getting more out of USS

13 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 50,000 pa Tax relief Flexibility Tax-free cash Long-term saving

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

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

16 Tax allowances Annual Allowance 50,000 pa 1 year of service X salary of 210, pa Plus Money Purchase AVC contributions 40,000 pa wef April 2014 Lifetime Allowance 1.5 million Pension of 65,217 pa 1.25 million wef April 2014

17 USS tax options

18 Added years modeller

19 Money Purchase AVC calculator

20 How to pay AVCs Revalued Benefits Use modeller on Contact Pensions Office Money Purchase Contact Prudential directly Telephone consultation

21 Keep your house in order

22 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

23 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)

24 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

25 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

26 What if you leave?

27 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

28 Options after leaving Transfer out? Draw at retirement Rejoin? At any time To any UK and many overseas schemes Plus deferred pension increases from leaving to retirement Re-link to earlier membership and add to deferred pension Full value of benefits

29 When can you stop working?

30 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

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

32 Early retirement Own choice Reductions apply for each year earlier than Normal Pension Age Redundancy Until 1 October 2014 no reductions apply Flexible retirement Incapacity retirement Take some of your pension and keep working, reductions may apply Income if your ability to work is limited by ill-health

33 Varying pension and cash Vary the cash less cash and higher pension More cash and lower pension Maximum 25% of capital value Multiply your pension by 20 Add on tax-free cash Add on any Prudential AVCs

34 What next?

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

36 Your questions

37 Pension increases In line with Official pensions Civil Service, NHS, Teaching etc Consumer Price Index used as measure of inflation Increases are capped Pensions increases Matches Official pensions up to 5% 5% plus 50% of increases above 5% Overall ceiling of 10% pa