USS Retirement Quotation worry

Tommy2024

Hoping some folks might be able to advise here.

I have been using the USS Benefit Illustrator for several years to help with my retirement planning, and recently got a written retirement quotation from USS based on retiring at 59. 

To my surprise the benefits in the quotation were materially higher than the Illustrator assuming the same retirement date (eg. £35k not £30k pa as per the Illustrator, lump sum similarly higher in the quotation).

I understand that the Illustrator is not totally accurate, particularly for retirement dates before age 60, but even by rolling forward my retirement date beyond 60 on the Illustrator I find that the benefits shown are still below those included in my written quotation for retirement a year or two earlier at 59! I also noted that the actuarial reduction indicated in my quotation for early retirement before the NPA is around 2.7%, which was much less than I expected.

Naturally my concern at this stage is to have the right numbers to base a retirement decision on. Has anyone else found a similar issue? Obviously you'd hope the USS quotation would be the most reliable!

Many thanks in advance.

Cornish_mum

Hi I don’t have a quotation to match to the Illustrator but have found it doesn’t match my excel workings and it doesn’t cope well with things out of the ordinary ie high AVC and early retirement. I too would be very interested to hear others experiences. My impression is it is very conservative and designed to provide a nice surprise/scare us into higher contributions.

CM

Southend_2

Some or all of your benefits may be payable without reduction at age 60 even if the normal pension age is higher than 60. Check out the USS guide for IFAs which is published on the USS website, it might give you some further insight.

spiralir

Does anyone know what the difference is between a USS quotation and a USS benefit illustration. Is the quotation a more accurate calculation of retirement benefits and/or does it provide more information than the illustrator does? If so, is there some reason USS doesn't provide on online tool for quotations?

Tommy2024

spiralir said:

Does anyone know what the difference is between a USS quotation and a USS benefit illustration. Is the quotation a more accurate calculation of retirement benefits and/or does it provide more information than the illustrator does? If so, is there some reason USS doesn't provide on online tool for quotations?

Well, in my case the USS quotation is a 16 page breakdown of benefits and explanation of options available on retirement, so a lot more than you get from the Illustrator. In terms of accuracy, naturally I'm hoping the quotation is most accurate as in my case its a lot more favourable. The gap is so large however that is why I raised it here. 

katejo

Tommy2024 said:

Hoping some folks might be able to advise here.

I have been using the USS Benefit Illustrator for several years to help with my retirement planning, and recently got a written retirement quotation from USS based on retiring at 59. 

To my surprise the benefits in the quotation were materially higher than the Illustrator assuming the same retirement date (eg. £35k not £30k pa as per the Illustrator, lump sum similarly higher in the quotation).

I understand that the Illustrator is not totally accurate, particularly for retirement dates before age 60, but even by rolling forward my retirement date beyond 60 on the Illustrator I find that the benefits shown are still below those included in my written quotation for retirement a year or two earlier at 59! I also noted that the actuarial reduction indicated in my quotation for early retirement before the NPA is around 2.7%, which was much less than I expected.

Naturally my concern at this stage is to have the right numbers to base a retirement decision on. Has anyone else found a similar issue? Obviously you'd hope the USS quotation would be the most reliable!

Many thanks in advance.

I am on SAUL not USS but was told earlier this year that the illustrator would not give me an accurate picture because I had paid for AVCs for an extended period (1995 until my 60th birthday this year). 

katejo

Southend_2 said:

Some or all of your benefits may be payable without reduction at age 60 even if the normal pension age is higher than 60. Check out the USS guide for IFAs which is published on the USS website, it might give you some further insight.

That is certainly the case for me on SAUL. I have a detailed table from SAUL which illustrates reductions which will apply if I retire at 65,66 or 67 but a large chunk of it would  be unaffected if I retired tomorrow,

Tommy2024

Thanks all for the comments.

If it helps anyone else, I have enquired directly to USS and have been told:
"The Illustrator figures are a good guidance for members who are looking to retire. However, the USS modeller does not always have the most update factors and CPI, they are updated as quickly as we are able. The figures can differ from a quotation you receive via USS. The team use the most up to date information we have, which sometimes a little ahead of the modeller updates."

The differences between the modeller and the quotation still seem quite significant to me, but it's reassuring at least that it is favourable. I guess the lesson here for those nearing retirement is to get a full quotation, as it might make quite a big difference to your affordable retirement date.