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USS - General discussion

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  • gwt1965
    gwt1965 Posts: 40 Forumite
    Second Anniversary 10 Posts Name Dropper
    Hope this helps and I’ve got it right. I’m taking voluntary severance through a unGod forbid your Uni does something to help you out (in taking - presumably? - the VS they want people to take). This is the employer that happily made extra contributions to the IB when they dropped the salary cap a couple of years ago, meaning that many staff would have extra put into the IB if they earned over £40k. Now, they’re saying they can’t do that and you need to sort it out yourself; really? 
    Yes. They’ve done it in previous VR schemes but not this one. To be honest, I’d sooner do it myself … at least that way I know it’s been done and if anything goes wrong (which is what I’m anticipating) then I can be certain it isn’t my fault! 
  • swindiff
    swindiff Posts: 976 Forumite
    Tenth Anniversary 500 Posts Name Dropper Newshound!
    Anyone else having trouble accessing myuss atm?
  • ussdave
    ussdave Posts: 372 Forumite
    Fifth Anniversary 100 Posts Name Dropper
    It seemed to be having problems last night but I can login again this morning.
  • swindiff
    swindiff Posts: 976 Forumite
    Tenth Anniversary 500 Posts Name Dropper Newshound!
    Cheers Dave. I could not get in last night or earlier this morning. Just tried again and it's let me in.
  • PJM_62
    PJM_62 Posts: 203 Forumite
    Part of the Furniture 100 Posts Name Dropper
    Anyone out there in flexible retirement and able to say what their myUSS shows about benefits.
    I'm 9 months into my first flex and was expecting to see values for how much RIB is already in payment and what is yet to be taken. I don't see any RIB info, only value of my IB pot. Also didn't get an annual member statement in Sept 24.

    Despite this I'm loving working a 3 day week 😀
    and monthly income of part-time pay + 80% of pension.
  • swindiff
    swindiff Posts: 976 Forumite
    Tenth Anniversary 500 Posts Name Dropper Newshound!
    myuss is actually still being pretty flaky this morning.  Let me in once, now can't get in again
  • swindiff
    swindiff Posts: 976 Forumite
    Tenth Anniversary 500 Posts Name Dropper Newshound!
    PJM_62 said:
    Anyone out there in flexible retirement and able to say what their myUSS shows about benefits.
    I'm 9 months into my first flex and was expecting to see values for how much RIB is already in payment and what is yet to be taken. I don't see any RIB info, only value of my IB pot. Also didn't get an annual member statement in Sept 24.

    Despite this I'm loving working a 3 day week 😀
    and monthly income of part-time pay + 80% of pension.
    I have not flexibly retired, but a friend of mine has.  He did a 20% flex and took 80% of his pension.  I seem to remember him saying that myuss did not seem set up to show what your benefits are once flexed.
  • swindiff
    swindiff Posts: 976 Forumite
    Tenth Anniversary 500 Posts Name Dropper Newshound!
    edited 25 January at 1:56PM
    The general consensus seems to have been on this forum that reverse commuting your DB lump sum into extra annual pension is not great value and its better to keep it as part of your tax free lump sum.  This was what I had been intending to do.  However I have been playing with the modeller and now I am not so sure.  Can I just run these figures by you all and check my understanding is correct.  I am nearly 55 and looking at retiring at 61

    Annual pension at 61 = £22,555
    DB Lump sum = £67,665
    Projected DC Pot = £252,608

    Assuming I did not reverse commute the DB lump sum and took the maximum tax free lump sum of 6.6667x my annual pension this would be

    Annual pension = £22,555
    Tax Free lump sum = £150,364
    Remaining Investment builder = £169,906

    If I did reverse commute the DB lump sum, the figures are

    Annual Pension = £25,611
    Tax Free lump sum = £170,738
    Remaining Investment builder = £81,870

    I have calculated that I need to live about 18 (age 79) years to be better off by reverse commuting the DB lump sum?

    Without reverse commuting
    Annual Pension £22,555 x 18 = £405,990
    Tax Free Lump Sum = £150,364
    Investment Builder (assuming 25% tax free and remaining taxed at 20%) = £144,420.10
    Total = £700,774.10

    With reverse commuting
    Annual Pension £25,611 x 18 = £460,998.00
    Tax Free lump sum = £170,738
    Investment Builder (assuming 25% tax free and remaining taxed at 20%) = £69,589.50
    Total = £701,325.50

    Does this look right.  This assumes that investment growth just keeps pace with inflation
  • Barralad77
    Barralad77 Posts: 79 Forumite
    10 Posts Name Dropper
    That seems to check out as far as the maths go but you could look at it from a different angle. For your figures the extra approx. £3,000 per year in gross pension is costing approx. £55,000 net (£295,000 vs £240,000, approx). To get a return of £3,000 from £55,000 would require a net (I.e.., tax-free) interest rate of around 5.5%. What interest rates will be 6 years from now is anyone’s guess, and 5.5% might be possible but it might not. In contrast, your £3,000 will be index-linked but subject to tax (@20%?), leaving you with approx. £2,400 net. To get a return of £2,400 on £55,000 requires a net interest rate of approx. 4.4% (which looks much more achievable than 5.5%). But overall, my sense is there’s not a lot in it. Both look good and I wouldn’t worry about making a wrong decision because there isn’t one (at least one that’s obvious to me). If you don’t need as much cash @61 then maybe choose the option that keeps more in the IB for longer?
  • uss_tish
    uss_tish Posts: 114 Forumite
    Fourth Anniversary 100 Posts Name Dropper
    Hello, original poster here seeking advice on my son's USS membership. Son works 0.5 FT in a senior admin role and was enrolled in USS; he has recently started another 0.5FT role at a lower grade at the same University but has been enrolled in the University’s own retirement fund for that role - should he have been enrolled in USS for both given he is already a USS member? The second, lower grade role would ordinarily not qualify for USS enrolment. The University’s  own pension scheme is DC.
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