USS proposed pension changes.

Andy_L

kidmugsy wrote: »

But have they all decreed that the salary to be used for calculating that part of the member's pension will not be his final salary but instead a salary from part way through his career?

That's the point of Moneyer's complaint. He feels that he's been misled. I'll bet he has: it's the problem (I'm guessing) of the difference between the happy chat of scheme leaflets and the grim reality of the trust deeds.

TBH I've never seen a scheme leaflet that talks about what happens in the event the closure of the scheme/bankruptcy of the employer/zombie apocalypse etc at all

kidmugsy

Andy_L wrote: »

TBH I've never seen a scheme leaflet that talks about what happens in the event the closure of the scheme/bankruptcy of the employer/zombie apocalypse etc at all

Then they are intrinsically misleading: all private final salary schemes are potentially at risk of closing - of course they should mention what would happen then, if only by pointing the reader to the relevant part of the trust deeds.

Daniel54

kidmugsy wrote: »

But have they all decreed that the salary to be used for calculating that part of the member's pension will not be his final salary but instead a salary from part way through his career?
.

In my case,and that of everyone else I know who has has had a private sector DB scheme closed,that is exactly the case.Accrued benefits are based on salary at the time of closure , and then subject to indexing -now at CPI ,up to the scheme NRD.

This has the greatest effect on those who expect their career development to produce above inflation increases in salary

A few moved to a CARE system for subsequent benefits,but the vast majority moved straight to DC.

It's not nice,but it happens.Better to focus on ensuring the replacement scheme is as generous as the employer can be persuaded to make it ,and then resigning oneself to making higher pension contributions

kidmugsy

Daniel54 wrote: »

In my case,and that of everyone else I know who has has had a private sector DB scheme closed,that is exactly the case. Accrued benefits are based on salary at the time of closure , and then subject to indexing -now at CPI ,up to the scheme NRD.

I hadn't known that. What about public schemes switching from Final Salary to Career-Average: is the same true of them?

amandajc

I believe that the LGPS calculate the FS entitlement using the final year of scheme membership, not 2014 (when it became a CARE pension).

It says on their website:

Your final year’s pay when you leave the LGPS will still be used to work out your benefits built up before 1 April 2014. This means that any future pay increases will be included in the final pay used to work out these benefits.

greenglide

And the USS proposal is, I assume, a proposal?

So if they negotiate a watered down version whereby the service to date is linked to the true final salary everyone will heave a sigh of release until next time?

Are the existing FS and CARE technically separate schemes so that they can say that the FS scheme is closing to new accruals and everyone can join the CARE scheme if they want?

kidmugsy

amandajc wrote: »

Your final year’s pay when you leave the LGPS will still be used to work out your benefits built up before 1 April 2014. This means that any future pay increases will be included in the final pay used to work out these benefits.

Though I resent funding it, that does seem to me to be the proper way to behave. The accrued benefits are effectively back pay and should be stumped up as promised.

Andy_L

kidmugsy wrote: »

Though I resent funding it, that does seem to me to be the proper way to behave. The accrued benefits are effectively back pay and should be stumped up as promised.

Although, with current pay restraint in the public sector you could well be better of with CPI indexation rather than pay rises depending on your age/career profile

Moneyer

Andy_L wrote: »

Although, with current pay restraint in the public sector you could well be better of with CPI indexation rather than pay rises depending on your age/career profile

Yes, I guess that could be the case for people close to retirement. For similar reasons, some people in USS would probably have higher benefits if they'd switched to CA when it was introduced for new members in 2011, rather than in 2016 as proposed. A bit galling given they've been paying contributions at a higher rate than CA members!

But for those of us with a long time until retirement, the biggest worry may be the cap on the CPI indexing. A few years of hyperinflation at any point in the next few decades could wipe out most of the benefits…..

kidmugsy

Moneyer wrote: »

...the biggest worry may be the cap on the CPI indexing. A few years of hyperinflation at any point in the next few decades could wipe out most of the benefits…..

People whose schemes have been taken over by the Pension Protection Fund will face the same problem. Ignore happy talk about the value of your pension being preserved; it won't be, since much of the value resides in the protection from inflation.