Hybrid DB & DC Scheme Question

swindiff

In Option 2 the tax free DB lump sum has been converted into extra annual pension of £1,032.  An inverse commutation rate of 16.1.  So every extra £1 of annual pension is costing you £16.10 of your lump sum.  You need to consider when converting will this be taxable when you draw your pension.

In option 3 the DC lump sum has all been converted into tax free cash.  Because this plus the DB lump sum is slightly over the 25% TFLS allowed, the remainder of your DB lump sum has been converted into extra pension at an inverse commutation rate of 32.47
TFLS is £37,052, but both of your DB and DC lump sums added together = £37,669, this is £617 above the allowance.  That £617 has been converted into extra annual pension of £19 (£5557-£5538).  £617/19 = 32.47

Blue_Horizon

UPDATE

USS have confirmed that an error was made within the letter sent to me.  There is no TFLS or DC Fund associated with the maximum pension option.  This makes this an easier decision for me. 

Thanks for your advice and questions.