USS Pension

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  • Southend1
    Southend1 Posts: 3,362 Forumite
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    wallofbeans wrote: »
    Yes - I'm starting to understand that - phew!

    What do "DB" and "DC" mean? Do other company pensions work in different ways? Like I said, this is my first experience of paying into a pension via a job so it's all new to me.



    DC = Defined contribution - the contributions are defined but the benefits are not e.g. you pay 5% of salary, employer pays 10% of salary. Income at retirement will depend on market performance. Lots of risk to individual - shortfall, inflation, market risk


    DB - Defined benefit - the benefit is defined e.g. 1/75 pension for each year of membership. The contributions will be whatever is required to meet the defined level of benefit. Much less risk to individual - you know what you will get in retirement regardless of market performance or inflation (mostly). Some risk may be transferred to members as in USS (inflation capping, cost sharing) but still much less risky.


    USS is under threat as the employers and the pensions regulator are trying to push for a switch to DC to shift all the risk on to individual employees, so join your union and resist this with all your strength. However, for now it is a great scheme (if slightly less good than it was a few years ago).
  • JoeCrystal
    JoeCrystal Posts: 3,013 Forumite
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    Southend1 wrote: »
    DC = Defined contribution - the contributions are defined but the benefits are not e.g. you pay 5% of salary, employer pays 10% of salary. Income at retirement will depend on market performance. Lots of risk to individual - shortfall, inflation, market risk

    I have to say that 10% is actually very generous by employer's standard. Due to auto-enrolment and other factors, according to ONS, the average Employer contribution from 2016 is 3.2%. Which make DB pension even more generous. ::)
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    The pension you build up at USS is deferred pay. Why would you say 'no' to more pay?
    Free the dunston one next time too.
  • DorsetLad
    DorsetLad Posts: 55 Forumite
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    You should sign up to My USS: https://www.uss.co.uk/forms/pre-login/registration

    From it you can get a lot of information about the current benefits from your USS pension, and there are easy-to-use modellers to estimate the projected benefits when you retire.

    To echo what others have said: USS is an excellent pension scheme. I am very glad that I have been able to retire recently with a USS pension. It certainly helps to make up for the generally poor pay levels in academia!
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