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Transfer my University of Cambridge CPS pension into my USS pension?

fillip2k
fillip2k Posts: 13 Forumite
10 Posts Second Anniversary
Hi all, excuse my ignorance (considerable as it maybe) but I've been considering if I should transfer my small (circa £6200) fund with the Cambridge University Assistants' Defined Contribution Pension Scheme into my current USS scheme. 

I left Cambridge in 2015, and my understanding is that the USS pension is a rather good one. So I thought perhaps while I'm actively contributing to it, it might be a good idea to transfer my small pot with Cambs into the USS one. I believe it would be put into the investment builder portion of the scheme. So it would be subject to a fee. But, as I understand it this could be invested in funds based on a risk level I'm happy with and perhaps grow into something bigger for me?

I've made a request for more information about a transfer from USS which I am waiting on at the moment. 

Sorry if this seems a basic set of questions, but tbh this is the first time I've really begun to pay attention to my pension! 
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Comments

  • Do you mean transfer DC pension funds from one DC scheme to another DC scheme?  

    Or buying DB pension using a DC fund?

    If the former I presume you realise that the pension scheme being rather good or not will largely be around costs and service.  The ability to grow your fund is based on the investment choices within the pension, not the pension wrapper itself.

    Will USS give access to funds you think will do better when compared to Cambridge?


  • hyubh
    hyubh Posts: 3,662 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    fillip2k said:
    Hi all, excuse my ignorance (considerable as it maybe) but I've been considering if I should transfer my small (circa £6200) fund with the Cambridge University Assistants' Defined Contribution Pension Scheme into my current USS scheme. 

    I left Cambridge in 2015, and my understanding is that the USS pension is a rather good one. So I thought perhaps while I'm actively contributing to it, it might be a good idea to transfer my small pot with Cambs into the USS one. I believe it would be put into the investment builder portion of the scheme.
    Yes, the USS doesn't allow transfers into the DB section ('Retirement Income Builder'), only the DC one ('Investment Builder'). It's possible the only inherent benefit in transferring is having all your DC pensions in one place. Beyond that you're looking at the fine print of charges and investment choices as Dazed_and_C0nfused says.
  • fillip2k
    fillip2k Posts: 13 Forumite
    10 Posts Second Anniversary
    edited 22 September 2023 am30 5:18AM
    Okay I'll have to have a further look. My main worry really is that I might forget about this little pot of cash and then end up not making the most of it. 

    I've been considering if once I have a few other things sorted if it would be a good idea for me to pay a little extra into my USS pension. 
  • It's also worth noting that the discounted rate for management fees doesn't apply to transfers in to the USS IB.

    There's not really any advantage to transferring in unless you are confident that you will stay under the salary threshold at USS where you start to accrue IB benefits (this is currently ~£40k but is due to increase to ~£60-70k in April).  If you are confident that you'll never have a salary above that figure (noting that it will increase with inflation over the years also) then you are likely to get a tax advantage by transferring, as you will be able to draw most or all of the funds tax free at the point of retirement.  

    Quite an unlikely outcome for most people I think, especially as you may have the option/desire to salary sacrifice funds into the IB, likely putting you over the tax free limit eventually.

    I'd personally leave it where it is if the management fees are particularly cheap.  Alternatively, transferring it to a SIPP and topping that up occasionally might give you more options are retirement (e.g. bridging a year or two before drawing your main pension).
  • I'd personally leave it where it is if the management fees are particularly cheap.  Alternatively, transferring it to a SIPP and topping that up occasionally might give you more options are retirement (e.g. bridging a year or two before drawing your main pension).

    This is one of the reasons I didn't transfer my DC pension to the USS IB. My understanding is that being able to take extra TFLS (using both the RIB and IB figures) only happens when you take both pensions together at NPA. I took early retirement and didn't want to touch my RIB/IB until NPA. Keeping some DC pension outside USS meant I can access this before NPA without affecting the TFLS I can take from USS at NPA.

    'Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it' - Albert Einstein.
  • I'd personally leave it where it is if the management fees are particularly cheap.  Alternatively, transferring it to a SIPP and topping that up occasionally might give you more options are retirement (e.g. bridging a year or two before drawing your main pension).

    This is one of the reasons I didn't transfer my DC pension to the USS IB. My understanding is that being able to take extra TFLS (using both the RIB and IB figures) only happens when you take both pensions together at NPA. I took early retirement and didn't want to touch my RIB/IB until NPA. Keeping some DC pension outside USS meant I can access this before NPA without affecting the TFLS I can take from USS at NPA.

    Just to clarify, you can still get the extra TFLS when taking USS before NPA.  You'll just have less of it due to early retirement factors.

    I know you know this but I think some readers could misconstrue the first part of your post to mean otherwise.
  • ussdave said:
    I'd personally leave it where it is if the management fees are particularly cheap.  Alternatively, transferring it to a SIPP and topping that up occasionally might give you more options are retirement (e.g. bridging a year or two before drawing your main pension).

    This is one of the reasons I didn't transfer my DC pension to the USS IB. My understanding is that being able to take extra TFLS (using both the RIB and IB figures) only happens when you take both pensions together at NPA. I took early retirement and didn't want to touch my RIB/IB until NPA. Keeping some DC pension outside USS meant I can access this before NPA without affecting the TFLS I can take from USS at NPA.

    Just to clarify, you can still get the extra TFLS when taking USS before NPA.  You'll just have less of it due to early retirement factors.

    I know you know this but I think some readers could misconstrue the first part of your post to mean otherwise.
    Yes, thanks for pointing that out. Given the USS actuarial reduction figures for taking RIB before NPA this was never something I considered doing. My preference was to fund the 'gap' with DC pension held outside USS.
    'Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it' - Albert Einstein.
  • fillip2k
    fillip2k Posts: 13 Forumite
    10 Posts Second Anniversary
    edited 22 September 2023 pm30 1:53PM
    Oh man, this is all making me a bit anxious! 😂

    Although I guess I need to start paying more attention to it! 

    I've worked out what most of the acronyms are but what is RIB?
  • fillip2k said:
    Oh man, this is all making me a bit anxious! 😂

    Although I guess I need to start paying more attention to it! 

    I've worked out what most of the acronyms are but what is RIB?
    Sorry - RIB is the retirement income builder (the USS term for a defined benefit (DB) pension). 
    'Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it' - Albert Einstein.
  • ussdave said:
    It's also worth noting that the discounted rate for management fees doesn't apply to transfers in to the USS IB.

    There's not really any advantage to transferring in unless you are confident that you will stay under the salary threshold at USS where you start to accrue IB benefits (this is currently ~£40k but is due to increase to ~£60-70k in April).  If you are confident that you'll never have a salary above that figure (noting that it will increase with inflation over the years also) then you are likely to get a tax advantage by transferring, as you will be able to draw most or all of the funds tax free at the point of retirement.  

    Quite an unlikely outcome for most people I think, especially as you may have the option/desire to salary sacrifice funds into the IB, likely putting you over the tax free limit eventually.

    I'd personally leave it where it is if the management fees are particularly cheap.  Alternatively, transferring it to a SIPP and topping that up occasionally might give you more options are retirement (e.g. bridging a year or two before drawing your main pension).
    I think based on this I will leave my Cambs pension as it is. (maybe change it to a high risk investment?)

    As I hope to be paying into the USS scheme for a while yet (general issues with finding funding in biosciences research aside) I think once I'm in a better position I will begin to make some more contributions into it to boost my pension. 

    Out of curiosity I've been told from a few different people that the USS scheme is one of the better defined benefit schemes out there. Not really knowing much about other schemes, what makes the USS one so good?

    Thanks!
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