USS pension - death in service, refund of DC contributions

FIREmenow

Hi All, just browsing to the info for IFAs on the USS pension, like you do, and it says this:

Could someone explain this to me please?

Does it literally mean a refund of savings in the Investment Builder?  As in, not inherited in a pension wrapper and will go unwrapped to person logged in the expression of wish/into the estate? Will it be taxable or not?

And is this literal contributions, not contributions plus growth?  I was thinking surely not, but it specifies that they will claw back employer match which you wouldn't expect in a normal DC pension would you? 

Contributions made to the Investment Builder which were not voluntary are not mentioned, are these just lost?

For a deferred members, it states 'Refund of Investment Builder account' which suggests the full amount.

Is the assumption that 3x annual salary will exceed the growth and employer match in the DC account?

If I am reading this correctly, does that mean that it could be in a member's interest (on behalf of their beneficiaries) to transfer an Investment Builder pot out if they were critically or terminally ill in order to preserve the pension wrapper?

As someone on an average income who is voluntarily adding 22% of salary into the Investment Builder and investing it for high growth, I'd really like to weigh up whether this is another good reason to transfer the DC pot out of USS at a critical break point, and then build it back up to the amount that could be taken completely tax-free as part of the PCLS. Considering the tiny percentage of members who chose their own investments rather than the default, I'm not their typical member.

Thanks for your thoughts.

The download for IFAs is here, relevant part on page 9 [pdf will download instantly] https://www.uss.co.uk/-/media/project/ussmainsite/files/financial-advisers/mfuss-for-ifa.pdf?rev=53d73d222e9e4d4fbdb7ec489a6c8828

Marcon

FIREmenow said:

If I am reading this correctly, does that mean that it could be in a member's interest (on behalf of their beneficiaries) to transfer an Investment Builder pot out if they were critically or terminally ill in order to preserve the pension wrapper?

Extreme care is needed when transferring a pension in circumstances where a member knows they are in very poor health. See https://techzone.abrdn.com/public/pensions/Tech-guide-pensions-IHT and start reading from: 

Ill-health and the 'two year rule'

FIREmenow

Thanks Marcon, noted.

Can anyone confirm how the refund of contributions would go to the beneficiaries?  Would these still be in a pension wrapper?

MPLMPL

Detailed on the USS Members site: https://www.uss.co.uk/-/media/project/ussmainsite/files/for-members/factsheets/what-happens-to-my-benefits-and-savings-if-i-die-whilst-paying-in-to-uss.pdf?rev=e317b15cddb94f0296c2c6db00f9212c&hash=661FE51ACF28201A74357AD252CFA6CB

"Your Investment Builder savings: Some of your savings will go to your beneficiaries. Any additional contributions (excluding The Match from your employer) and any other pension savings recently transferred in to USS will go to your beneficiaries. These will be tax-free if you die before age 75 or taxed at the recipient’s marginal rate if you die after age 75.
But some will be credited back to USS Like the employer part of The Match and your, and your employers, contributions over the salary threshold to the Investment Builder. This is because we use your full salary when we calculate your life cover. "

FIREmenow

Thanks MPLMPL, that is reassuring.