Another USS with Voluntary Severance Query

Barralad77

Twigwidge said:

@Asimovs_nightfall
Definetly question this, I have just asked for my final pension quote directly from USS and they confirmed I can pay any amount from my VES payment into the income builder portion of my pension

Is this correct? Are you sure it’s income builder and not investment builder? For everything else in your post it suggests that this refers to the Investment Builder.

Twigwidge

Barralad77 said:

Twigwidge said:

@Asimovs_nightfall
Definetly question this, I have just asked for my final pension quote directly from USS and they confirmed I can pay any amount from my VES payment into the income builder portion of my pension

Is this correct? Are you sure it’s income builder and not investment builder? For everything else in your post it suggests that this refers to the Investment Builder.

@ Barralad77 Well spotted, I was typing too fast for my own good, I did indeed mean investment builder, I have just corrected 

Cobbler_tone

I know 3 people with VS letters and they are all consistent. £30,000 tax free with the 'option' to pay any remainder into the Investment Builder if they so wish.

Asimovs_nightfall

Cobbler_tone said:

I know 3 people with VS letters and they are all consistent. £30,000 tax free with the 'option' to pay any remainder into the Investment Builder if they so wish.

Is this not limited by the level of their pensionable earnings for the year?

If, for example, they have earned £20k to the point of the VLS, and had already paid in to their pension including IB £5k, would they only be able to put £15k into their IB because of the limit of their pensionable earnings?  This is a bit detailed and complicated, but of course is important.  

Ta in anticipation of any response.  

Cobbler_tone

Asimovs_nightfall said:

Cobbler_tone said:

I know 3 people with VS letters and they are all consistent. £30,000 tax free with the 'option' to pay any remainder into the Investment Builder if they so wish.

Is this not limited by the level of their pensionable earnings for the year?

If, for example, they have earned £20k to the point of the VLS, and had already paid in to their pension including IB £5k, would they only be able to put £15k into their IB because of the limit of their pensionable earnings?  This is a bit detailed and complicated, but of course is important.  

Ta in anticipation of any response.  

The VS would be additional pensionable earnings.

Barralad77

Cobbler_tone said:

Asimovs_nightfall said:

Cobbler_tone said:

I know 3 people with VS letters and they are all consistent. £30,000 tax free with the 'option' to pay any remainder into the Investment Builder if they so wish.

Is this not limited by the level of their pensionable earnings for the year?

If, for example, they have earned £20k to the point of the VLS, and had already paid in to their pension including IB £5k, would they only be able to put £15k into their IB because of the limit of their pensionable earnings?  This is a bit detailed and complicated, but of course is important.  

Ta in anticipation of any response.  

The VS would be additional pensionable earnings.

Plus you can take advantage of any unused annual allowance for the previous 3 years (when the AA was either £40k or £60k - can’t remember exactly when it changed). It’s highly likely that for most people this means they can comfortably accommodate the additional IB contributions made from the non-cash part of the VS settlement.

Asimovs_nightfall

Latest from my pension department re VLS and paying into pension:

"You are limited to only be able to pay into the Investment builder what you earn between April and your date of leaving. Voluntary severance payments cannot be included in your pensionable pay."

ussdave

From memory, pay in lieu of notice can't be paid into your pension at my institution either.  Or at least can't be salary sacrificed.