Anyone familiar with USS pension?

SMcGill

The USS pension Normal Retirement Date increased to 66 in October to reflect the increase in SPA. What I’m trying to understand is if this affects the pension I built up whilst working for universities between 2005 and 2017, or whether it only relates to pension built up since the increase. As I’m 57 now my SPA will increase to 67 so if I am affected it makes quite a difference to my retirement planning.

I can’t seem to get a clear answer from the USS website (some info says 66, but the benefit modeller still calculates to 65) and I received an unhelpful answer in response to my email enquiry so I’m hoping someone here can help.

2nd_time_buyer

My understanding is it only relates to the pension built up since the increase.
The link below also suggests that for service from 1 April 1995 to 30 September 2011 early retirement factor are only applied below 63.5 years.
https://www.uss.co.uk/-/media/project/ussmainsite/files/financial-advisers/mfuss-for-ifa.pdf?rev=e83c6925f0d54db9aa15251679cc5626

SMcGill

Good heavens, if I could figure out how to post a heart emoji to you I would! I wasn’t aware of the early retirement factor either so my mood has now swung from slightly worried to cautiously pleased. I’ll read the doc on your link, looks like something I wish I’d stumbled over sooner.

2nd_time_buyer

Yes, it took some finding - it is under the section for financial advisors. I am not certain my interpretation is correct. I understand that member are entitled to one free quotation a year - so that might be the best bet to get the official line. 

NedS

2nd_time_buyer said:

My understanding is it only relates to the pension built up since the increase.
The link below also suggests that for service from 1 April 1995 to 30 September 2011 early retirement factor are only applied below 63.5 years.
https://www.uss.co.uk/-/media/project/ussmainsite/files/financial-advisers/mfuss-for-ifa.pdf?rev=e83c6925f0d54db9aa15251679cc5626

Thank you for that document!

I'm a deferred member, with 8 years service between 1996 and 2004. My deferred members letter dated 2004 states my scheme retirement age is 65, but also states (in the small print) that I can request to take my pension from age 63.5 without any reduction (although I believe 65 remains the scheme normal retirement age). Why would anyone not want to take their pension 1.5 years early with no reduction? Once I hit 63 I will be phoning the administrators to confirm I would like to start taking my pension at 63.5. Presumably this clause was introduced in response to equalising the scheme retirement age of men and women.

AlanP_2

NedS said:

2nd_time_buyer said:

My understanding is it only relates to the pension built up since the increase.
The link below also suggests that for service from 1 April 1995 to 30 September 2011 early retirement factor are only applied below 63.5 years.
https://www.uss.co.uk/-/media/project/ussmainsite/files/financial-advisers/mfuss-for-ifa.pdf?rev=e83c6925f0d54db9aa15251679cc5626

Thank you for that document!

I'm a deferred member, with 8 years service between 1996 and 2004. My deferred members letter dated 2004 states my scheme retirement age is 65, but also states (in the small print) that I can request to take my pension from age 63.5 without any reduction (although I believe 65 remains the scheme normal retirement age). Why would anyone not want to take their pension 1.5 years early with no reduction? Once I hit 63 I will be phoning the administrators to confirm I would like to start taking my pension at 63.5. Presumably this clause was introduced in response to equalising the scheme retirement age of men and women.

Check the underlying details out.

I am a deferred member of a scheme (not USS) that has a NRA of 65 but the pension can be taken unreduced at 60.

Using your understandable logic I should take it at 60, BUT, it increases by 7.5% pa until GMP age of 65 so I would lose out in monetary terms.

This is probabaly only an issue when the pension is deferred, if I was still working there then I wouldn't be getting the 7.5% pa uplift.


So, what happens to your deferred USS pension between 63.5 and 65?  

hyubh

AlanP_2 said:

Using your understandable logic I should take it at 60, BUT, it increases by 7.5% pa until GMP age of 65 so I would lose out in monetary terms.

This is probabaly only an issue when the pension is deferred, if I was still working there then I wouldn't be getting the 7.5% pa uplift.


So, what happens to your deferred USS pension between 63.5 and 65?  

By the by, but the USS operates a public sector treatment of GMP, so S148 not fixed rate revaluation (amongst other things).

AlanP_2

hyubh said:

AlanP_2 said:

Using your understandable logic I should take it at 60, BUT, it increases by 7.5% pa until GMP age of 65 so I would lose out in monetary terms.

This is probabaly only an issue when the pension is deferred, if I was still working there then I wouldn't be getting the 7.5% pa uplift.


So, what happens to your deferred USS pension between 63.5 and 65?  

By the by, but the USS operates a public sector treatment of GMP, so S148 not fixed rate revaluation (amongst other things).

Thanks. I was more highlighting the point that pension "rules" can be quite complex and interact with each other to affect an individual's situation.

NedS said "Why would anyone not want to take their pension 1.5 years early with no reduction".

I was outlining a situation that answered that point even though superficially the approach would be to take at 60 with no actuarial reduction.

By the by for me and this deferred pension anyway as I am planning to take the CETV next year.

Southend1

2nd_time_buyer said:

My understanding is it only relates to the pension built up since the increase.
The link below also suggests that for service from 1 April 1995 to 30 September 2011 early retirement factor are only applied below 63.5 years.
https://www.uss.co.uk/-/media/project/ussmainsite/files/financial-advisers/mfuss-for-ifa.pdf?rev=e83c6925f0d54db9aa15251679cc5626

Interesting! Thanks for sharing the link. 

Does anyone know whether the final salary pension can be taken independently of the retirement income builder pension? So if someone with membership spanning pre and post October 2016 has stopped working by age 63.5 and wants to take the final salary pension at that age unreduced for service between 1 April 1995 and 30 September 2011, but continue deferral of the income builder pension until NPA - would that be possible? Or does all the DB pension have to be commenced at the same time?

2nd_time_buyer

Southend1 said:

2nd_time_buyer said:

My understanding is it only relates to the pension built up since the increase.
The link below also suggests that for service from 1 April 1995 to 30 September 2011 early retirement factor are only applied below 63.5 years.
https://www.uss.co.uk/-/media/project/ussmainsite/files/financial-advisers/mfuss-for-ifa.pdf?rev=e83c6925f0d54db9aa15251679cc5626

Interesting! Thanks for sharing the link. 

Does anyone know whether the final salary pension can be taken independently of the retirement income builder pension? So if someone with membership spanning pre and post October 2016 has stopped working by age 63.5 and wants to take the final salary pension at that age unreduced for service between 1 April 1995 and 30 September 2011, but continue deferral of the income builder pension until NPA - would that be possible? Or does all the DB pension have to be commenced at the same time?

No pretty certain you can't do that. The early retirement factors are pretty generous (at the moment). So it may not make a huge difference if you have the majority of your pension in the final salary section.
Incidentally, one nugget of information that caught my eye was " If you are aged 50 or more, with five years’ service, are made redundant and you have been paying into USS 

continuously since 5 April 2006, you will be entitled to access your pension from age 50". I assume unreduced.

Johnnyboy11

2nd_time_buyer said:

My understanding is it only relates to the pension built up since the increase.
The link below also suggests that for service from 1 April 1995 to 30 September 2011 early retirement factor are only applied below 63.5 years.
https://www.uss.co.uk/-/media/project/ussmainsite/files/financial-advisers/mfuss-for-ifa.pdf?rev=e83c6925f0d54db9aa15251679cc5626

Thanks from me too, that link is really useful. Particulary the generous calculation of final salary for pre-March 2016 membership and the RPI indexation for up to 13 years prior. That's going to beat typical USS salary increases by a long way, no wonder the fund is in bad shape.