Pension Options - what to do??

caninesapien

Hi all.

I recently got a promotion in work and was invited to change my pension fund to the USS scheme - www.uss.co.uk - but I have no idea if this is the right option for me or really how I should make that decision...

Currently I'm on a Final Salary scheme - I contribute 7.5% and my employer contributes 23.4%. Now, the USS scheme I have been offered means I would need to contribute 9.6% (or maybe 9.8% based on what I read online) whilst my employer contributes 21.1%.

As I said, I'm quite clueless but.... it seems to me that the USS scheme means I contribute more (so bringing home less pay monthly) and my employer contributes less. Does that sound right?? I believe there are more perks to the USS but at the very basic level it seems as though I would be bringing home less each month while not really increasing the amount going into my pension fund.... or have I got that completely wrong?

Hoping for any general advice around this since everywhere I look online feels quite impenetrable in terms of the jargon and terminology.

Thank you!!

ussdave

Can you give more details about your current scheme?  Ideally a name of the scheme but also details such as accrual rate, inflation increases and whether or not it's really final salary or a career average.

On the face of the information you've given, your current scheme sounds better...but the devil is in the details and all that.

caninesapien

ussdave said:

Can you give more details about your current scheme?  Ideally a name of the scheme but also details such as accrual rate, inflation increases and whether or not it's really final salary or a career average.

On the face of the information you've given, your current scheme sounds better...but the devil is in the details and all that.

Thanks for the reply @ussdave - here are some details from my employer's intranet page. I work for a university but hesitant to give details in the interests of identification etc! Hope this helps:

We operate a salary sacrifice arrangement for pension contributions. This means that the University pays your contribution on your behalf, giving you tax relief on your contribution and meaning you also pay less National Insurance contributions. You will automatically participate in this arrangement.

The contribution rates for you and the University are not fixed. The overall contribution rate is determined by the Trustees and the Employer on the basis of advice from the Scheme Actuary.

I have worked at this institution since 21 Dec 2011, and I believe the pensions changed on 1 Jan 2012, which means I'm in a Final Salary section, and those who joined after 21 Dec 2011 are now in a Career Average Revalued Earnings (CARE) section.

I have the pension members booklet here which of course has a lot of information but I can try to provide more if required. Unfortunately I'm not sure which information is the most relevant!

My understanding is that Final Salary is the most sensible one to remain in for now but... well, I don't know!