USS - General discussion

Panda_Panda

Newbie here! I'm also very puzzled by this. Like some of you, my projections have taken a large hit since yesterday. Perhaps I am naive but should the defined benefit figures be affected by a dip in the market? Surely that can't be correct. The dip is far too big to be explained by the inflation rate change.

Barralad77

Panda_Panda said:

Newbie here! I'm also very puzzled by this. Like some of you, my projections have taken a large hit since yesterday. Perhaps I am naive but should the defined benefit figures be affected by a dip in the market? Surely that can't be correct. The dip is far too big to be explained by the inflation rate change.

That’s right, defined benefit element is independent of the markets; only the value of the Investment Builder changes with the markets. The value of the IB can affect the amount you can take as tax-free cash, depending on how much you have in there, relative to what your annuity (and by extension, the 3 x lump sum figure is) but I think the thing people are most flummoxed by is the difference in the annuity figures being quoted, and as you say, the explanation proffered by USS (the uplift is marginally lower than the one the modeller was using for its calculations as late as 48 hours ago) seems wanting in my opinion.

Twigwidge

The lady I spoke to at USS today said their team had not been aware of any changes in the model, I double checked that the early retirement factors had not been changed, and was assured that they had not been (as far as the team member was aware). It does seem crazy that the defined benefit amounts would change so much, even factoring in the 1.7% increase rather than 2.5 that the model is based on, I am hoping it is just a glitch and that my numbers will return to the pre April 1st figures... fingers crossed

Panda_Panda

Just to check, are we sure that the modeller was updated with the new ERFs when they came into force? They've not been added retrospectively now have they? 

Twigwidge

I am pretty sure that the new ERFs were added to the model previously as I noticed that my predicted pension and lump decreased at the time, I was told today that the ERFs had not been changed again, nothing would surprise me with USS at the moment, the model seems to be changing almost daily, you would think there would be a summary of changes to the model for members to refer to, but no such luck.

Barralad77

The new (worse) ERFs came into effect last October. @Twigwidge, did the person you spoke to offer to go away and find out why things have changed so much (given that the only explanation currently being proffered seems unlikely)? I sense that a number of people are contacting USS about this, so it’s not unreasonable to expect them to provide the explanation. If I were on the end of the phone, fielding calls about this, I’d be demanding just such an explanation from my employer to be able to pass on. Of course, posting something to this effect on the website would be even better, but USS are not known for being helpful when it comes to informing people of important changes (…cough….).

Twigwidge

@Barralad77 No in fact the only things that she mentioned were the 1.7% uplift (instead of the 2.5% baked into the model) and possible underperformance of investments as the likely causes in the drop, I got the impression that she did not really know and suggested that I get a new quote for the most accurate figures. I am surprised that more people are not posting about this on here to be honest

Barralad77

Thanks. Was she aware that underperforming investments have no effect on the defined benefit part of the scheme? Hopefully… but I’m not surprised that she didn’t know enough to offer anything like an explanation as that’s been my experience most of the time when contacting USS. They do have - or at least, did have - some very knowledgeable people on the phone but you have to be lucky enough to catch them. I’m not sure how many people think about their pension, never mind check what it’s worth. I’m amazed when colleagues tell me they don’t know anything about the tax benefits of the Investment Builder (especially given that, where I work, these contributions are made via salary sacrifice). 

Morgan-Green

Hello folks

I was told last week, on my 59th birthday no less, that I am being made redundant from my role.  It's early days in the process but I'm inclined to try and ride out the year to my 60th and then draw down my pension from USS.  I'm tempted to take the voluntary redundancy package on offer and try to top up my pension with it, but what is the best approach in doing this?

I should add I'm recently mortgage-free (yay!) with a current salary of £66k, and the modeller is quoting a pension at 60 of £19k with a £57k lump sum and £7.1k in the investment builder.  This takes a big hit if I take it now, which is why I'd rather do all I can to wait a year and top it up as much as is allowed while I still employed.

I also have around £100k in savings.

Any advice would be most gratefully received!

Morgan-Green

Meant to add the VR payment would be around 4.1k and I have a three month contractual notice period, which I hope can be paid in lieu of notice.