What do folks think of the following commutation rates?

SMcGill

Wonder why my factors are different from the OP's? I have deferred final salary only, nothing in Investment Builder or AVCs

I think because USS commutation rates vary by age. Your 29.7 figure sounds like the one for age 65. The rate for doing the same thing at age 55 is 42.8.

NedS

SMcGill said:

Wonder why my factors are different from the OP's? I have deferred final salary only, nothing in Investment Builder or AVCs

I think because USS commutation rates vary by age. Your 29.7 figure sounds like the one for age 65. The rate for doing the same thing at age 55 is 42.8.

Thank you. Yes, I put in my scheme retirement age of 65

PJM_62

NedS said:

This got me interested so I've just checked the USS modeller for myself. Last time I checked, back in 2019, the commutation rates were 17.58 in both directions, either giving up pension for higher lump sum or giving up lump sum for higher pension, relative to the scheme default of lump sum 3 x annual pension.

Just checked again now, and the factors are 29.73 to give up lump sum for more pension (more expensive!) and 20.52 to given up pension for higher lump sum. Clearly the scheme want to encourage people to take a higher lump sum rather than reduce their lump sum in exchange for higher pension, relative to 18 months ago.

Wonder why my factors are different from the OP's? I have deferred final salary only, nothing in Investment Builder or AVCs

Theres an interesting piece here about the commutation rates changes that happened in October last year. 
https://www.hepi.ac.uk/2020/08/19/another-nail-in-the-coffin-of-defined-benefit-pensions/

2nd_time_buyer

I really struggle to understand how the USS operates. They seem to tackle things in quite a political way when there isn't any need to. The way the have presented the various valuations, proposed changes etc. have been fairly disingenuous at best and sometimes appear outright dishonest. At the same time they are claiming increased governance, transparency etc. 

I am not sure why they don't just present things as they are. I think most members accept that pensions won't continue to be as generous but by always seeming to be puling the wool over our eyes, they are losing the trust of the individual members and the Universities.

Sorry rant over. 

NedS

PJM_62 said:

NedS said:

This got me interested so I've just checked the USS modeller for myself. Last time I checked, back in 2019, the commutation rates were 17.58 in both directions, either giving up pension for higher lump sum or giving up lump sum for higher pension, relative to the scheme default of lump sum 3 x annual pension.

Just checked again now, and the factors are 29.73 to give up lump sum for more pension (more expensive!) and 20.52 to given up pension for higher lump sum. Clearly the scheme want to encourage people to take a higher lump sum rather than reduce their lump sum in exchange for higher pension, relative to 18 months ago.

Wonder why my factors are different from the OP's? I have deferred final salary only, nothing in Investment Builder or AVCs

Theres an interesting piece here about the commutation rates changes that happened in October last year. 
https://www.hepi.ac.uk/2020/08/19/another-nail-in-the-coffin-of-defined-benefit-pensions/

Thank you for that article, very interesting. I was considering commuting some of my lump sum for more pension, but at these rates it may be better value for me to purchase the equivalent added pension in my current Civil Service scheme and 'reimburse' myself from the lump sum from my USS pension, with the added bonus that the CS scheme isn't capped at 5% CPI growth. Downside is CS pays at 67 whereas USS is 65, and I don't think the spousal rights are as generous in the CS scheme. Something to look into closer to the time.