new to proper jobs and pensions...

xylophone

If the money stays with USS then does it make interest or just stay the exact same amount?

No, it revalues in deferment - http://www.uss.co.uk/Guides%20and%20Booklets/Leaving%20the%20Scheme%20FS.pdf

If I went back to full time freelance, is it easy enough to set up a pension scheme that it could be transferred into?

You can start a personal pension - it would be up to the provider whether or not a pension transfer would be accepted.

wallofbeans

These terms just confuse me but I think you mean -- it goes up with interest while it sits their and I can't touch it until I hit retirement age.

But it looks like it'll be tricky to move it eslewhere unless I worked in another similar institution but if it just has to sit and there and gain interest.

My worry was that I'd lose it altogether or it would not gain interest for me, which would be irritating.

Thanks so much for your help with this!

xylophone wrote: »

No, it revalues in deferment - http://www.uss.co.uk/Guides%20and%20Booklets/Leaving%20the%20Scheme%20FS.pdf



You can start a personal pension - it would be up to the provider whether or not a pension transfer would be accepted.

xylophone

Revaluation in deferment is not the same as interest - have a look at this

http://www.uss.co.uk/SchemeGuide/FinalSalaryBenefitssection/leavingthescheme/Pages/default.aspx

"In USS these benefits are known as ‘deferred benefits’ and the value of these benefits increases over time by the increase in line with official pensions. However, for service built up after 30 September 2011 USS matches official pension increases up to 5% a year and then 50% of any increase to official pensions in excess of 5% a year with a limit of 10% in any one year. So if official pensions increased by 15% the USS increase would be 10% in that year"

By "official pensions" one assumes they mean S52a orders - see

https://www.barnett-waddingham.co.uk/comment-insight/blog/2012/07/24/revaluation-for-early-leavers/

wallofbeans

So if it sits there it'll go up by 4.75% per year?

So what's different before 2 years and after?

This is all very confusing when you don't know anything about this stuff!

xylophone wrote: »

Revaluation in deferment is not the same as interest - have a look at this

http://www.uss.co.uk/SchemeGuide/FinalSalaryBenefitssection/leavingthescheme/Pages/default.aspx

"In USS these benefits are known as ‘deferred benefits’ and the value of these benefits increases over time by the increase in line with official pensions. However, for service built up after 30 September 2011 USS matches official pension increases up to 5% a year and then 50% of any increase to official pensions in excess of 5% a year with a limit of 10% in any one year. So if official pensions increased by 15% the USS increase would be 10% in that year"

By "official pensions" one assumes they mean S52a orders - see

https://www.barnett-waddingham.co.uk/comment-insight/blog/2012/07/24/revaluation-for-early-leavers/

hyubh

wallofbeans wrote: »

So if it sits there it'll go up by 4.75% per year?

It will go up by whatever CPI is, though capped somewhat if CPI is above 5%.

So what's different before 2 years and after?

Between one day and three months' membership: employee contributions (if any) are refunded by your employer net of the tax and NI you would have paid had you never joined the scheme in the first place. From the USS' point of view it will be just that, i.e. as if you never had joined; if they have any record of you joining, they would be free to scrub it from their systems.

Between three months and two years (and no transfer in): the USS will give you the option of a refund of any employee contributions (net of any tax and NI relief previously enjoyed) or a transfer out to another pension scheme (DB or DC, occupational or personal). Any transfer out will be on the basis of a 'cash equivalent transfer value' of the USS benefits you have earned, rather than simply the contributions paid.

More than two years (or between three months and two years with a transfer in): a refund is no longer an option, and instead, you have by default deferred (alias preserved) benefits in the scheme with the option to transfer out.

Generally speaking, an inability to have a refund due to salary sacrifice isn't really that much of a handicap because (unless you really, really needed the money right now) a transfer out after less than two years membership would be much the better option anyhow.

atush

Lets put this int he most basic terms (which wont be yours but maybe similar).

Say you have 2K in a pension scheme. Say you as an employee have 1K in contributions, 200 of which was tax relief. So your 1K of pension cost you 800. Then say your employer matched contributions so they put in 1K too. So you have 2K, which only cost you 800.

So say you wanted to leave after 3 months. So you have a choice of 2K in another pension scheme, or 700 back in cash. Approx. Losing almost 65% of the fund.

Thereby flushing 1300 quid down the toilet.

Which is better?