USS - General discussion

2nd_time_buyer

I have some thoughts on the 2021 valuation but I'm not sure they will be appreciated.

I am very interested in the total cost of changing the benefits and contributions, only to change them back again (not to mention the cost of the industrial action). I am also interested to hear how executive pay was affected by that balls up. Most of all, it would be nice to have an apology.

Instead what I expect we will hear will be platitudes and management speak.

[Deleted User]

I've just - like many here, I guess - just received an email from USS with my 'Statutory Notice of Changes'. Five changes are highlighted (lower contributions, increased benefits, etc.) but still no mention of the changes to the ERFs. It's fantastically irritating. I do wonder whether they are allowed to change these again so soon after the previous round of changes made last year. On that point, last year I couldn't understand why, when using the online modeller, my pension actually went down rather than up. How was that possible in a DB scheme, I wondered? The response I got from USS was flabbergasting. I was told that the ERFs had changed, to my detriment (as I was plugging in an early retirement date) and that it wasn't true that my benefits were being reduced (they even confirmed that this "simply wasn't possible in a DB scheme"). The only rationale inference to draw from this exercise in semantic flim-flammery is that the annuity and LS I received when finishing work early aren't classed as 'benefits'. 'Benefits' only refers to what you get if you make it to your NPA. They appear to have uncoupled the concept of 'Benefits' from the concept of 'Early Retirement Factors'.

FIREmenow

I was told that the ERFs had changed, to my detriment (as I was plugging in an early retirement date) and that it wasn't true that my benefits were being reduced (they even confirmed that this "simply wasn't possible in a DB scheme").

I think this goes with the general stance that ERFs are considered a fair recalculation as they are based on being in payment for longer at the lower amount - so not reduced overall.  I mean this in terms of the nature of ERFs, not saying I agree with the recent change.  I agree that they should be more transparent about the change, it will be very poor if they make a comms announcement about it after they go live in April, or just continue to downplay it apart from updating the website.

NickBFS

FIREmenow said:

I was told that the ERFs had changed, to my detriment (as I was plugging in an early retirement date) and that it wasn't true that my benefits were being reduced (they even confirmed that this "simply wasn't possible in a DB scheme").

I think this goes with the general stance that ERFs are considered a fair recalculation as they are based on being in payment for longer at the lower amount - so not reduced overall.  I mean this in terms of the nature of ERFs, not saying I agree with the recent change.  I agree that they should be more transparent about the change, it will be very poor if they make a comms announcement about it after they go live in April, or just continue to downplay it apart from updating the website.

it seems to me that this conflates two completely different things:
1) the rationale for ERFs in the first place;
2) changes in the ERFs.

That there should be ERFs for the reasons that you indicate is not, I think, questioned by anyone here. This, however, does not in itself provide any explanation for a change in those ERFs. And I do not think that it can reasonably be argued that a change in ERFs is not, for those who are affected, a change in the benefits provided.

FIREmenow

Yes exactly. As I said, I don't agree with it; I do not think it is reasonable either. But I don't think that will stop them conflating the two if it suits them, and that their standpoint would be that it is not a change in the benefits provided, that changes in ERFs are expected over time, and that it would be unreasonable for a member to suggest that their early retirement should be more favourable, and so on.  Perhaps my cynicism towards USS did not come across - with the '21 revaluation in particular in mind, I don't have much faith in USS using reasonable arguments.

PJM_62

Anyone able to confirm what the (cpi based) pension increase % is for this year ?

FIREmenow

It's 6.7% according to the Guide for IFAs : https://www.uss.co.uk/-/media/project/ussmainsite/files/financial-advisers/mfuss-for-ifa.pdf?rev=01577199f44d47a099fa829d63aa65cb

Also spotted on there that it looks like they have delayed the change to the early retirement factors to 1 October 2024 (on page 14)? I hadn't seen anything about this. The one on the left from 1 April 2023 is actually the better rates that were in place prior to 1 April 2022 as if the 2022 changes to benefit accrued from that date never happened.  

Beckster1964

I just got my pension uplift this morning - 6.7% for pre 2011 pension and 5.85% for post 2011. Would be frustrating if they have delayed changing ERF factors - I only pulled the retirement plug before April because of the anticipated changes!

FIREmenow

Website still says 1 April 2024, so clear as mud! https://www.uss.co.uk/for-members/calculate-your-benefits/factors-used-by-uss

Wonder what the calculator is using.

EDIT: I've contacted them to ask for clarification/correction and to see what information the benefit calculator is currently using.

2nd_time_buyer

Beckster1964 said:

I just got my pension uplift this morning - 6.7% for pre 2011 pension and 5.85% for post 2011. Would be frustrating if they have delayed changing ERF factors - I only pulled the retirement plug before April because of the anticipated changes!

Please can you remind me why there is a difference between pre- and post- 2011? Was that the change from RPI to CPI or was that a change in the cap?