A Summary of the Universities Superannuation Scheme (June 2017)

Transcription

1 HUMAN RESOURCES A Summary of the Universities Superannuation Scheme (June 2017) 1. Purpose The purpose of this guide is to provide a basic understanding of the benefits available from the Universities Superannuation Scheme (USS). Members of staff will receive the member booklet Your guide to the Universities Superannuation Scheme shortly after they commence working at the University, usually by although a hard copy is available on request. If you wish to receive a copy before then, you can: - download it from the the USS website - request one from the Payroll and Pensions Office, either by telephone: +44 (0) or pensions-enquiries@ncl.ac.uk The scheme may vary from time to time and members are consulted over any proposed changes. Details of the most recent changes can be found on the USS website at An overview of the main benefits of the scheme can be found in the attached document A new employee s guide to USS and My USS. This is also available online at 2. New Appointments Subject to the exceptions referred to below, and to the conditions of their employment, new members of staff will be automatically enrolled, immediately on starting their employment, into the USS. You may withdraw from the scheme within the first 3 months of joining and receive a refund of your contributions, but it will not be possible to opt out of the scheme prior to your start date. Contributions will be deducted from your salary accordingly. If you were a member of the NHS Pension Scheme immediately prior to joining the University and are eligible to continue in membership of the scheme you should indicate this on the Payroll Starters Form and an Application form will be issued to you. Alternatively, if you are a Teaching Assistant on a variable time, hourly paid contract, you will be assessed under the auto-enrolment criteria. If you meet the criteria to be automatically enrolled, this will be postponed for three months. You will be eligible to opt in to the USS within the three month postponement period. You may also be able to opt in if you do not meet the auto-enrolment criteria; further information will be provided after the auto-enrolment assessment. Page 1 of 3

2 HUMAN RESOURCES Should you decide to withdraw from membership of USS your decision will not be irrevocable. Subject to certain conditions, you can join or rejoin USS at a later date. Statutory regulations require the University to periodically re-enrol employees in to a pension scheme; however we will notify you of this requirement at the appropriate time. 3. Exceptions If you are already in receipt of a USS or NHS Pension Scheme retirement pension, please notify the Payroll and Pensions Office to inform them of this as you will not rejoin the USS but will be automatically enrolled into the National Employment Savings Trust (NEST) if you are under state pension age and your earnings reach the auto-enrolment earnings trigger (currently 833 per month (2017/18 rates)). You will receive further information regarding the scheme and the opt-out arrangements shortly after enrolment into the scheme. You can opt-out, but only after you have been enrolled and you will need to contact NEST either online or by phone to activate the opt-out process If you are currently receiving a USS Incapacity retirement pension, you should inform USS Ltd of your employment as they may need to withdraw or suspend your pension. In those circumstances, you will be automatically enrolled into the USS, however terms and conditions may be imposed by the USS. 4. Extensions of Contract / Re-appointments If you are already a member, your membership will be continued. If you are not currently a member you may wish to consider applying to join now. Further information is available from the Payroll and Pensions Office (ext 86487). 5. Withdrawing from the scheme You may subsequently decide to withdraw from the Scheme, in which case you will cease to enjoy any of the benefits. If you opt-out within three months of the date of the commencement of your employment, your withdrawal from the Scheme will have retrospective effect to that date and you will be deemed never to have been a member of USS. In that event any contributions you have made to USS will be refunded less a deduction in respect of tax relief you received on your contribution whilst a member of USS. If you decide to withdraw from USS later than three months after the date of commencement of your employment you may do so by completing the appropriate withdrawal form available from the Payroll and Pensions Office. If you withdraw with less than 2 years pensionable service you may be eligible for a refund of your own contributions, subject to a deduction of tax. This does not apply if you join as a Pensions+ member see below. Page 2 of 3

3 HUMAN RESOURCES 6. Pensions+ You will join USS initially on a contributory basis. After 3 months membership, we will review your situation and, where appropriate, you will be changed to a non-contributory Pensions+ member for your standard contributions and the additional 1% match should you elect to take it. This is designed to ensure that you and the University gain from the maximum National Insurance relief that is available. As a Pensions+ member, the University will pay contributions on your behalf directly into the USS. In return, you agree to a corresponding reduction in your salary. Your pension benefits will be calculated using your Reference Salary, which is your pay before any salary sacrifice for Pensions+. If you were a member of the USS in a previous employment before joining Newcastle University, and have not received a refund of contributions or transferred your benefits out of the scheme, you may join as a Pensions+ member upon request. Please request an opt-in form from the Payroll and Pensions Office. Further detailed information on Pensions+ can be found in the in the Introducing Pensions+ leaflet available at 7. What to do next If you wish to take advantage of the very substantial benefits provided by the USS, you need do nothing at this stage. The Guide for USS Members will be sent to you shortly after you commence working at the University. We expect most members will be better off under the Pensions+ arrangements, however if you initially join on a contributory basis and your contract of employment is for 2 years or more, we will contact you after 3 months of joining the scheme with further information. You are still eligible to participate in the USS as a contributory member if you do not wish to participate in Pensions+. 8. Further Information on USS Benefits Please note that this summary is no more than a guide to the principal benefits provided by the USS and is not, in any way, definitive. The only source of definitive information on the benefits provided by the USS is in the USS rules. The USS provides much more information on the scheme on their website which may be found at Alternatively, you may contact the University Payroll and Pensions Office, either by telephone: +44 (0) or pensions-enquiries@ncl.ac.uk R Boggie/V Wall May 2017 Page 3 of 3

4 A new employee s guide to USS and My USS This information is for you if you are due to join USS. It provides an overview of the main benefits of the scheme and links to further information. It also explains what actions you need to take as soon as you join through our online portal My USS. Visit the USS website at uss.co.uk for more information and a copy of the most up to date member booklet*. The website will also explain what actions you need to take as soon as you join through our online portal My USS. All members join the USS Retirement Income Builder. The USS Retirement Income Builder provides benefits based on a formula using your salary (up to a threshold) for each year that you are a member. At the end of each scheme year (31 March), benefits are calculated as follows: USS Retirement Income Builder Pension = 1/75th x salary ** + Cash sum = 3 x pension These benefits are then reviewed annually and increases applied using the standard USS pension increases. USS Investment Builder This section operates on a basis known as defined contribution. This means that your contributions, and any paid by your employer, are invested to provide benefits for your retirement, in addition to your USS Retirement Income Builder benefits. All members can choose to pay into the USS Investment Builder. For members earning more than the salary threshold, you and your employer automatically pay into the USS Investment Builder. Salary threshold The salary threshold is currently 55,550 per annum. This will be automatically revalued each April in line with increases in official pensions (currently linked to CPI), subject to certain caps. The salary threshold is to be reviewed in March If you earn more than the salary threshold your benefits will be calculated under the USS Retirement Income Builder section for salary up to the salary threshold. Contributions on salary in excess of the salary threshold paid by you and your employer are paid automatically in to the USS Investment Builder. Additionally, any member can choose to pay into the USS Investment Builder, whatever their salary. If you choose to pay at least 1% of your salary into the USS Investment Builder your employer will automatically match the first 1% of your salary as a contribution. You could choose to pay in more, but your employer will automatically match the first 1% of salary only. * If you need a printed copy of the member booklet you can print this off the USS website. Alternatively, your employer will be able to provide a printed copy for you. ** Salary up to and including the threshold. New employees guide to USS April 2017 v1 Page 1 of 3

5 How it works Here is an example to illustrate how this works based on a member with pensionable salary of 60,000 for the year. Benefits in the USS retirement Income Builder Pension = 1/75th x 55,550 = (salary restricted by salary threshold) Cash sum = 3 x = 2, Contributions to the USS Investment Builder Your contribution = 8% x 4,450 = (based on salary above the threshold) Your employer s contribution = 12% x 4,450 = (based on salary above the threshold) If you also elected to pay 2% more into the scheme, the following amounts would be paid into the USS Investement Builder: The Match Your additional 2% = 2% x 60,000 = 1, (based on full pensionable salary) Matching contribution from your employer = 1% x 60,000 = (based on full pensionable salary) So with these additional contributions, and the match from your employer, the total paid into the USS Investment Builder would be 2,690. What you need to do once you ve joined Register for USS Once you join you will be sent a membership certificate which will include you russ membership number. Once you have this number go to uss.co.uk/myuss and register for My USS. My USS My Uss is where you can go to make your contribution and investment choices to the USS Investment Builder and also where you can update your personal details, such as your target retirement age. You can add and manage additional contributions, including the match and update security details including your password, PIN and security questions. New employees guide to USS April 2017 v1 Page 2 of 3

6 USS benefits summary Pension Tax-free cash sum Your contribution Employer contribution The Match Bereavement cover Incapacity cover Pension increases Salary sacrifice Pension of 1/75th of each year of salary up to the salary threshold. Each year of pension is added together and revalued (increased) each year in line with USS pension increases 3 x Pension 8% of salary If you earn more than the salary threshold, 8% of salary in excess of the salary threshold is paid in to the USS Investment Builder. 18% of salary 12% is paid in to the USS Investment Builder for salary in excess of the salary threshold. If you elect to pay at least 1% of full pensionable salary in to the USS Investment Builder then your employer will automatically match that contribution. Note the automatic match is limited to 1% of your full salary. Any additional payments from you and the employer match are invested in the USS Investment Builder. Should you pass away whilst paying in to the scheme: 3 x Salary lump sum (salary not subject to threshold) Spouse s/dependant s pension of 50% of your estimated pension at 65. Children s pensions of up to a maximum of 75% (for two or more children) of your estimated pension at 65. Total or partial incapacity cover in the event that you suffer from a serious illness or incapacity. Total incapacity provides income equivalent to your estimated pension at 65, (benefits are based on the full salary and not subject to the threshold), partial is based on benefits earned to date. Benefits under the USS Retirement Income Builder and past benefits increase in line with official pensions1 up to 5% each year. If official pensions increase by more than 5%, USS will only pay half the difference up to a maximum 10% increase in any year. For benefits earned before 1 October 2011, increases match those paid by official pensions. If your employer participates in salary sacrifice for pension contributions, further information is available from your employer. Full salary before any sacrifice is used in the USS benefit calculations. Visit the USS website at uss.co.uk for more information and a copy of the most up to date member booklet2 1 Official pensions are schemes operated by employers in the public sector such as NHS, Teaching and Civil Service schemes. 2 If you need a printed copy of the member booklet you can print this off the USS website. Alternatively, your employer will be able to provide a printed copy for you. This publication is for general guidance only. It is not a legal document and does not explain all situations or eventualities. USS is governed by a trust deed and rules and if there is any difference between this publication and the trust deed and rules the latter prevail. Members are advised to check with their employer contact for latest information regarding the scheme, and any changes that may have occurred to its rules and benefits. New employees guide to USS April 2017 v1 Page 3 of 3