USS - General discussion

bluenose1

Bit like pulling teeth to get the quote I want from USS.
I asked for a quote to start my pension 1st April 24 as despite leaving 2nd January 24 doing the sums (thanks to whoever suggested it) means with the inflation rise and the extra £215 x 3 for the pension, I am better off not taking it until April 24 as my lump sum increases more than the pension payments I would have received.
Unfortunately the inflation rise and £215 increases don’t yet appear in my forecast, probably cos not yet ratified by the powers that be, so not too bothered.

• They quote for standard pension and lump sum x 3.

• They quote for the max tax free lump based on increasing your annual pension to max allowable.

What  they don’t quote, so most people won’t realise you can do it is the standard lump sum, with no commutation and max tax free lump sum.

Now waiting for the quote I want, will keep you updated. 

PJM_62

Be interesting to see what they send you this time.😀

I phoned up yesterday with (another) question I had about Flexible Retirement. Thinking I'll be asking for working 2 days a week , for one year, from 1st April 24. Taking 80% of RIB for that year + max TFLS.

While on the phone got offered an up to date quote. I made it clear I won't be converting any of my TFLS or IB to additional pension.
Again be interesting to see what's sent.

PJM_62

bluenose1 said:

.. with the inflation rise and the extra £215 x 3 for the pension, I am better off not taking it until April 24 as my lump sum increases more than the pension payments I would have received.. 

Can you explain a bit more about this.

NickBFS

PJM_62 said:

bluenose1 said:

.. with the inflation rise and the extra £215 x 3 for the pension, I am better off not taking it until April 24 as my lump sum increases more than the pension payments I would have received.. 

Can you explain a bit more about this.

I think bluenose1 is referring to the discussion on page 2 of this thread.

spiralir

MPLMPL said:

If you stick it in Excel/Google Sheets  etc. then type: =((A1*23/4)-(3*A1))/0.75 where cell A1 is the cell where you enter your DB annual pension sum.

Presumably this amount should to be capped if adding it to the DB pension would exceed 25% of last year's LTA (i.e. £268275)?  Also future withdrawals of the remaining uncrystallised fund would then be fully taxed?

SMcGill

I don’t have anything to add to the above but thought I’d share my recent experience of triggering my USS pension in September. My own IB pot was tiny so I opted to take all of it as a lump sum and I was told that USS procedure is to start disinvesting around a month prior to retirement date. I called them around 5-6 weeks before my retirement date to check everything was on track and sure enough USS hadn’t noted my request so who knows what might’ve happened … it may have all sorted itself out but personally I’m glad I checked.

bluenose1

PJM_62 said:

bluenose1 said:

.. with the inflation rise and the extra £215 x 3 for the pension, I am better off not taking it until April 24 as my lump sum increases more than the pension payments I would have received.. 

Can you explain a bit more about this.

By not starting my pension until 1st April 24 my pension and lump sum will be based on the increase awarded for inflation, which I think will be just under 6%. 

There is also a one off additional award of £250 for all current and deferred  members who paid into the scheme between a certain date to compensate for the prior reduction in benefits, which means if I don’t take my pension until 1st April 24 my lump sum will also be increased by an additional £215 x 3.

I will actually be financially better off starting my pension in April 24 rather than January 24 as the increased lump sum will be more than the 3 months pension foregone. 

The above is all my understanding, not yet confirmed by USS. 

Simes122

bluenose1 said:

PJM_62 said:

bluenose1 said:

.. with the inflation rise and the extra £215 x 3 for the pension, I am better off not taking it until April 24 as my lump sum increases more than the pension payments I would have received.. 

Can you explain a bit more about this.

By not starting my pension until 1st April 24 my pension and lump sum will be based on the increase awarded for inflation, which I think will be just under 6%. 

There is also a one off additional award of £250 for all current and deferred  members who paid into the scheme between a certain date to compensate for the prior reduction in benefits, which means if I don’t take my pension until 1st April 24 my lump sum will also be increased by an additional £215 x 3.

I will actually be financially better off starting my pension in April 24 rather than January 24 as the increased lump sum will be more than the 3 months pension foregone. 

The above is all my understanding, not yet confirmed by USS. 

Hi Bluenose - I think your logic is correct re the £215 x 3 which I’m watching carefully myself to see how they impose the rules.  (I haven’t yet put mine into payment and am still a member but working p/t).

The indexation occurs whether in payment or not so I’m not sure that factor influences the retirement date like the lump sum catchup one off does?

Simes122

Simes122 said:

bluenose1 said:

PJM_62 said:

bluenose1 said:

.. with the inflation rise and the extra £215 x 3 for the pension, I am better off not taking it until April 24 as my lump sum increases more than the pension payments I would have received.. 

Can you explain a bit more about this.

By not starting my pension until 1st April 24 my pension and lump sum will be based on the increase awarded for inflation, which I think will be just under 6%. 

There is also a one off additional award of £250 for all current and deferred  members who paid into the scheme between a certain date to compensate for the prior reduction in benefits, which means if I don’t take my pension until 1st April 24 my lump sum will also be increased by an additional £215 x 3.

I will actually be financially better off starting my pension in April 24 rather than January 24 as the increased lump sum will be more than the 3 months pension foregone. 

The above is all my understanding, not yet confirmed by USS. 

Hi Bluenose - I think your logic is correct re the £215 x 3 which I’m watching carefully myself to see how they impose the rules.  (I haven’t yet put mine into payment and am still a member but working p/t).

The indexation occurs whether in payment or not so I’m not sure that factor influences the retirement date like the lump sum catchup one off does?

To answer my own query re the indexation - I think it does make a material difference to the 3x lump sum amount, so can see it’s worth pausing if one’s RB is  at a reasonable level.

FIREmenow

Hi All,
Thanks for the really helpful discussion on taking the DC part of the USS pension tax free, and the handy Excel formula, which has replaced my round-the-houses way of working it out in my spreadsheets.

Can anyone tell me how actuarial reduction impacts this calculation (if at all)? Is it still the same calculation using the reduced DB annual amount and lump sum?  Is the reduced annual amount still only multiplied by 20?  I'm playing with the new benefits calculator and don't want to make an error.

Many thanks and Happy New Year