USS pension - different retirement ages and actuarial reduction

Unpensioned56

I'm trying to understand the impact of the changes in normal retirement age over the last 30 years and would be grateful for any help! I have a uss pension whose DB section is constituted of four different tranches, each with a different retirement age (60, 63 1/2, 65, 66). About a quarter of my final pension has an NRA of 60, the rest is later. Is there any way I can take just that bit at 60 (maybe as part of flexible retirement), and the rest later? Or does it just get averaged out?

OldScientist

When I retired early from USS there didn't seem to be a way of unpicking the various retirement ages - they just used the average value (IIRC about 63 in my case). However, since I took it in one go, I didn't explore whether I could take different bits at different times - unless someone has actually done this, it might be a question to ask USS directly.

Dazed_and_C0nfused

Are you still employed and contributing to USS?

ussdave

I think you have to take it all at once but worth checking this as OldScientist has suggested.

I don't believe that there is any beneficial revaluation of benefits when you take them late so in your position I would look to plan to take the pension at 60 if at all possible.

Unpensioned56

Yes I'm still employed and contributing. I would keep gaining years (at a very capped salary) as long as I'm working- whereas if I completely go at 60 I'd lose a lot as the other bits are mostly 65-6. I'll see if I can get USS to answer, never simple. Thanks!

katejo

Unpensioned56 said:

Yes I'm still employed and contributing. I would keep gaining years (at a very capped salary) as long as I'm working- whereas if I completely go at 60 I'd lose a lot as the other bits are mostly 65-6. I'll see if I can get USS to answer, never simple. Thanks!

A colleague of mine (now 60) is trying to get this info out of USS now and they are being very vague about it. I am also 60 and on SAUL which has been more helpful. I recently requested a projection of my pension if I retire at 65/66/67 and have been given a breakdown of how much I will lose if I retire at different ages. If I retired now, I wouldn't lose anything at all from the closed final salary which finished in 2016 or from my AVC's which finished earlier this year.

SMcGill

I tried to do what you you want to do and the answer from USS was no, you can only ‘retire’ once. 

Universidad

Unpensioned56 said:

Yes I'm still employed and contributing. I would keep gaining years (at a very capped salary) as long as I'm working- whereas if I completely go at 60 I'd lose a lot as the other bits are mostly 65-6. I'll see if I can get USS to answer, never simple. Thanks!

If you go after 60 you'll lose a lot, as you'll be missing thousands of pounds worth of payments you are entitled to have from 60.

One of the many ways the changes to the USS scheme have been handled more poorly than some other DB schemes. 

One of the plus sides, though, is that as far as I know the benefits you earn are tied to the State Pension Age at the time they are earned, rather than at the time you reach your SPA. (Many other schemes have all benefits tied to SPA from your retirement SPA).

On the other hand, many of those schemes tied to the SPA, such as Civil Service Alpha, do have options to improve retirement age, and if you have pension benefits from an earlier scheme - such as Classic - you can take them at a different time to Alpha. 

I've always wondered how USS have got away with closing one scheme, for the purposes of ending the final salary link early, but can still force you to tie the retirement ages of the two schemes together, as if it was one scheme.  Seems like double dipping to me.

katejo

Universidad said:

Unpensioned56 said:

Yes I'm still employed and contributing. I would keep gaining years (at a very capped salary) as long as I'm working- whereas if I completely go at 60 I'd lose a lot as the other bits are mostly 65-6. I'll see if I can get USS to answer, never simple. Thanks!

If you go after 60 you'll lose a lot, as you'll be missing thousands of pounds worth of payments you are entitled to have from 60.

One of the many ways the changes to the USS scheme have been handled more poorly than some other DB schemes. 

One of the plus sides, though, is that as far as I know the benefits you earn are tied to the State Pension Age at the time they are earned, rather than at the time you reach your SPA. (Many other schemes have all benefits tied to SPA from your retirement SPA).

On the other hand, many of those schemes tied to the SPA, such as Civil Service Alpha, do have options to improve retirement age, and if you have pension benefits from an earlier scheme - such as Classic - you can take them at a different time to Alpha. 

I've always wondered how USS have got away with closing one scheme, for the purposes of ending the final salary link early, but can still force you to tie the retirement ages of the two schemes together, as if it was one scheme.  Seems like double dipping to me.

When SAUL brought its final pension scheme to an end in 2016, we were told that we would have full access to the Final pension part with no penalty as long as we continued paying into the scheme until 60 as I have done. My AVC which was built up between 1994 and my 60th this year would also be unaffected if I retired before 65.  I will lose some of the value of the current CARE replacement if I retire before 65/66/67 (different amounts).