USS - General discussion

PJM_62

I've just taken my 2nd Flex as part of flexible retirement.
Both times I was able to use IB money to do the max tfls thing of 6.67 x pension.

Barralad77

PJM_62 said:

I've just taken my 2nd Flex as part of flexible retirement.
Both times I was able to use IB money to do the max tfls thing of 6.67 x pension.

But you took them (DB & IB) ‘together’, just fractionally. The OP would be taking one (IB) but not the other (DB), and I think that may mean they lose the ‘x 6.67’ opportunity. But best checking with USS before making any decision.

Edit: I could be confusing this with an alternative scenario where someone takes the DB but doesn’t take any/all of the possible 3,67 x pension from the IB; in that case whatever is left in the IB is only 25% tax-exempt (in other words, they will have missed the one-off opportunity to take the maximum 3.67 from the IB). 

ussdave

My understanding is that the alternative scenario in your edit is the constraint.

That said, I was completely wrong about pre-RB UFPLS so take whatever I say with a grain of salt.

PJM_62

Also there's possibly the issue of an ufpls withdrawal triggering the MPAA

guymo

PJM_62 said:

Not sure if your last point is correct. 
25% of ufpls is tax free but it's not a tfls. 

Rest sounds doable. But don't assume taking DB early results in a big overall loss. The erf isnt meant to be punitive.
Do the calcs / get a quote to compare totals when taking early and deferring.

I am as sure as I can be that the tax-free portion of a UFPLS is counted against the lump-sum allowance. 

Good point about the ERF not being punitive. From a rough calculation, the total amount of money you receive from the scheme if you retire aged 60 (7 years before NPA by the time I get there) is outweighed by what you get if you defer for 7 years, as long as you live past 81 years of age. A proper calculation here would need to estimate returns on investments for savings not spent when taking the pension early. I guess that's part of the job of the actuaries and it is just about believable that this would work out neutral. Thank you for pointing this out. 

PJM_62

guymo said:

I am as sure as I can be that the tax-free portion of a UFPLS is counted against the lump-sum allowance. 

Good point about the ERF not being punitive. From a rough calculation, the total amount of money you receive from the scheme if you retire aged 60 (7 years before NPA by the time I get there) is outweighed by what you get if you defer for 7 years, as long as you live past 81 years of age. A proper calculation here would need to estimate returns on investments for savings not spent when taking the pension early. I guess that's part of the job of the actuaries and it is just about believable that this would work out neutral. Thank you for pointing this out. 

My bad. Having googled it now , you're absolutely right about the 25% and LSA.
First time I'm ever seen that mentioned.
Maybe because it affects few people. 🤷