USS pension to be restored - will my estimated pension go up?

MPLMPL

spiralir said:

I recently received my Annual Member Statement (Sep 2023) which includes a valuation of my pension benefits and savings on the 31 March 2023. Will USS issue a revised statement when this restoration is implemented?

Separately, I believe that annual pension increases happen on April 1st each year (calculated based on the CPI the previous September). Does this mean that the annual pension given in the the Annual Member Statement changes 1 day later on April 1st?

Thanks.

The annual member statement that you recieved in September will have the April 1st uplift included/applied. This is your current pension benefits (it states revalued up to 31st March 2023, if you take the pension from 1st April, this is the value it would be based on, if you took it on e.g. 1st March, it would be based on value before revaluation).

USS will have to update the statement at some point, but as these changes are unlikely to be implemented before April 2024, I would imagine it will be included in your annual statement that will be likely released in September 2024.

There is potential for a revised statement before then though, particularly as the increase in benefit will impact Annual Allowance calculations (i.e. more of annual allowance will be used). As yet, I don't know which year(s) it will apply to - the affected years 2022-23, 2023-24 or the 2024-25 tax year?
An additional £215 plus £645 lump sum would use £4085 of the annual allowance.

spiralir

PensionApr2024  ~= (PensionApr2023 + AccruedApr23toMar24) x (100%+Sept2023CPI) + £215

I understand the CPI % is a more complicated calculation, e.g. if CPI above 5%,  and also the full CPI % is used for pensions benefits before 2011.

MPLMPL

spiralir said:

PensionApr2024  ~= (PensionApr2023 + AccruedApr23toMar24) x (100%+Sept2023CPI) + £215

I understand the CPI % is a more complicated calculation, e.g. if CPI above 5%,  and also the full CPI % is used for pensions benefits before 2011.

Don't think that the AccruedApr23toMar24 gets the Sept2023CPI uplift, just the PensionApr2023? Happy to be corrected on this.
Yes, pre-2011 FS gets full CPI uplift, 2011 onwards CPI up to 5% and then half of any CPI above 5%. This year i.e. Apr2023 the pension increase for post-2001 service was 7.55% (Sept22 CPI was 10.1%, so got 5% plus half of 5.1% = 7.55%). 

Doctor_Who

MPLMPL said:

spiralir said:

PensionApr2024  ~= (PensionApr2023 + AccruedApr23toMar24) x (100%+Sept2023CPI) + £215

I understand the CPI % is a more complicated calculation, e.g. if CPI above 5%,  and also the full CPI % is used for pensions benefits before 2011.

Don't think that the AccruedApr23toMar24 gets the Sept2023CPI uplift, just the PensionApr2023? Happy to be corrected on this.
Yes, pre-2011 FS gets full CPI uplift, 2011 onwards CPI up to 5% and then half of any CPI above 5%. This year i.e. Apr2023 the pension increase for post-2001 service was 7.55% (Sept22 CPI was 10.1%, so got 5% plus half of 5.1% = 7.55%). 

That is my understanding. The current year's accrual doesn't get inflation uprated in the current year, but will in subsequent years. The 'CPI' figure for pension accrued from 2011 is capped at 10% (i.e. 5% plus half of the next 10%).

spiralir

MPLML and Doctor_Who.  Many thanks for the corrections and clarifications.