USS benefit calculator and deferred benefits

NickBFS

I was contemplating deferring the start of my pension for a few months to lower the impact of ERFs. I therefore used the USS benefit calculator to compare starting to take my pension start away at a given age versus deferring it.
To my surprise, the DB element of the pension was lower when deferring it compared to taking it straight away (I would have expected the reverse).
For instance, If I enter a retirement age of 61 year and 4 months, the benefit calculator gives me a DB pension of 32445. However, if I enter a retirement age of 62 but leaving USS at 61 year old and 4 months (therefore delaying the taking of benefits by 8 months), I get a DB pension of 31237.  Weirder still, if I enter the "leaving USS" section in the same month as my reaching the age of 61 year old 4 months (so leaving USS less than two weeks before the date I wish to start receiving my pension) , I get an even lower DB pension of 30476.

Am I missing something? Are pensions calculated differently for deferred members versus retiring straightaway when finishing employment with a USS institution? Or is it just another USS benefit calculator 'bug'/'feature/'oddity'?

swindiff

You probably have in your contract that you can retire from the age of 60 without incurring any actuarial reduction for pre 2011 benefits, I know I do.  However, if you leave employment that age increases to 63 1/2. Therefore if you start your pension at 61 and 4 months but are no longer employed all your benefits are being reduced.  If you start your pension at 60 whilst still in employment, only the benefits post Oct 2011 will be reduced.  If you put 63 and 6 months into the modeller you should see quite a step change.

NickBFS

Thanks a lot, @swindiff. Yes, that seems to tally.  

deltrotter

@swindiff - I was in the USS. From 1998 to 2019 and then returned to the sector and rejoined last year.

Do you know if my terms will be the same re the actuarial reduction at 60 as if I had stayed in the USS throughout, or will I have lost them by leaving?

TIA

Del

swindiff

You will have to check to see what is in your contract.  Do you know if you could retire at 60 without reduction before you left and re-joined?

deltrotter

Not sure @swindiff, I'll do some digging.