Transfer deferred DC pension into USS?

Southend1

Hi

I have c.£25k in a DC scheme from a previous employer. I currently work for a University and am a member of the FS section of USS. Out of interest, I have requested a quote to transfer my old DC benefits into USS. I'm expecting to receive the quote in a couple of weeks time.

But... next year my salary is being cut by c.15%. So my question is - will I get a better transfer quote by waiting until next year when my pensionable salary is lower? (Assuming the DC fund is still worth the same amount next year).

Also, any thoughts on whether this is a good idea? Part of me thinks leave the DC pension where it is as I am approx 30-35 (40-50?!) years from retirement and let it grow. Also I wouldn't have all my eggs in the same basket.

Grateful for any thoughts/views on this.

kidmugsy

I suppose you could list the pros and cons.

Cons include your egg/basket point. Another is the expectation that you'll be able to crystallise your DC pension at 55, rather than having the money tied up in USS until whatever its then Normal Retirement Age may be. Yet another is that Final Salary schemes tend to be pretty wonderful until they fail, whereupon they're not.

What, you cry, how could the second biggest private pension scheme in the country fail? Well, one mechanism would be if universities start going bust. As each fails, the remainder have to carry its burden, making their own burdens bigger and so increasing the chances of their failing.

My own feeling is that the coalition government has been less than frank about the dreadful state of the public finances that it inherited from Blair/Brown - presumably because the civil servants said "we must preserve confidence, Chancellor". Whether things are so awful that USS could go down I don't know, of course. But one of my pensions when I retired was USS and I can tell you that I took maximum lump sum, which you may interpret as a vote of no confidence.

Southend1

Some good points there, thanks. At the moment I'm 75% against transferring but not totally sure.

Any thoughts specifically on whether I will get more years for my money by waiting till my pay cut kicks in?

kidmugsy

Southend1 wrote: »

Some good points there, thanks. At the moment I'm 75% against transferring but not totally sure.

Any thoughts specifically on whether I will get more years for my money by waiting till my pay cut kicks in?

It sounds likely: why not just ask?

It would be pretty good to get extra additional years and then return to a higher pay.