Rejoining USS

deltrotter

Hi everyone

I worked for a uni for 20 years up to 2019 and then moved out of the sector. I paid into the USS for the full duration.

I am thinking about taking a role at a university later this year and will rejoin the USS.

I have noted the deterioration in terms of what you get from the USS over the last four years, but my question is, are my previous 20 years seperate and will remain on old rules? I am particularly looking at the change in pension increases when retired now being restricted to a max of 2.5%.

TIA

Del

ussdave

Your previous pension accrument is unaffected.  It's just the new acrrual that will be subject to the horrible inflation linking.

Universidad

deltrotter said:

I am particularly looking at the change in pension increases when retired now being restricted to a max of 2.5%.

Yes, the inflation linking in the years you already have remains in place. You are not going to subject your old benefits to that ridiculous inflation cap.

Although there is still a cap that is affecting them, it's nowhere near as punitive.

For benefits accrued before Oct '11, they'll be fully matched for inflation, but for benefits accrued after that and up to 2019, they'll be partly matched. That is, fully matched up to 5%, half matching up to 15% (so this year, you're getting 7.5% instead of 10.1% on that portion of your accrued benefits).

ussdave said:

Your previous pension accrument is unaffected.

However, I think it is the case that you need to take the pension all at once, and the new accruals will have a higher (and rising) retirement age.

So if you were planning to retire at 63.5 or at 65, you'll have to accept a level of actuarial reduction on top of the already dramatically reduced benefits of the current USS offering when you do retire.

It's still worth being in the scheme, of course. Free money, tax efficient, etc.

But if your current USS pension isn't most of the way to enough to retire on, you'll maybe want to make other provisions.

deltrotter

Thank you both, it is really appreciated.

I was quite shocked at the new terms... To say the least.

I'll be going up in the investment builder as well, and I know that I am fortunate in being able to do so.