USS v TPS university pension

Simon979 · 29 July 2016 at 1:35PM

Hi,

I'd be very grateful for any updated thoughts about the benefits of a USS and a TPS pensions scheme.

I transferred from a pre-92 university to a post-92 one two years ago, and kept my USS pension. However, I am wondering if I should transfer to the TPS after all. I am 37 and willing to pay the extra contributions into the TPS. I've done a decent amount of research but I am still confused (I don't have a head for this sort of thing, admittedly, but that's not for want of trying). As far as I can tell, with so many changes already undertaken, or forecast, it is difficult to say that one is 'better' than the other, but I'd very much welcome any views,
Thanks
Simon

kidmugsy · 29 July 2016 at 2:12PM

You've waited two years; is the option to transfer still available?

Simon979 · 30 July 2016 at 11:44AM

Apparently so, although this time it would be non-reversible

kidmugsy · 30 July 2016 at 1:39PM

I take a rather gloomy view of USS, but since I know nowt about TPS that's not much help to you.

So treat this with that caveat in mind. USS is a private sector scheme. If it ends in the mire than it will fall, at least in principle, into the hands of the PPF.

TPS is (I assume) an unfunded government scheme with (I presume) far more members. I imagine it would need an unprecedented catastrophe for it to end up in the mire.

hyubh · 30 July 2016 at 3:28PM

Simon979 wrote: »

Apparently so

On what basis? The TPS has a time limit of 12 months:

https://www.teacherspensions.co.uk/news/public-news/2016/06/transfer-in-form-webform-now-live.aspx

If you have some sort of special dispensation, then the transfer will nevertheless be on less generous non-Club terms compared to initiating it within a year (assuming the USS remains a member of the Public Sector Transfer Club - not sure it does).

Simon979 · 1 August 2016 at 12:11PM

I need to check this again, but I think you can transfer to the TPS at any time, but only have 12 months to transfer benefits from your old pension scheme. You're right in that USS doesn't seem to be a Club member any more...although I can't really tell how much I would lose out on if it is a non-club transfer (any suggestions gratefully received!)

Many thanks for the replies

PensionTech · 1 August 2016 at 1:17PM

I'm wondering if the confusion is in the word "transfer". In a pensions context, this usually means to move accrued benefits from one scheme (such as USS) into a new scheme (such as TPS). It does look like this option is now closed to you - there's another link here, in much the same vein as the one hyubh posted: https://www.teacherspensions.co.uk/members/your-scheme/starting-out/got-another-pension.aspx

I think what you might be talking about is whether to opt out of accruing further benefits in the USS scheme, and start accruing new benefits in the TPS. Is that right?

hyubh · 1 August 2016 at 6:33PM

Simon979 wrote: »

I need to check this again, but I think you can transfer to the TPS at any time, but only have 12 months to transfer benefits from your old pension scheme.

Just to be clear... are you saying the post-92 university participates in the USS, and allowed you to stay in it when you joined them? Was this a special TUPE+ arrangement...?

Simon979 · 1 August 2016 at 6:51PM

PensionTech wrote: »

I'm wondering if the confusion is in the word "transfer". In a pensions context, this usually means to move accrued benefits from one scheme (such as USS) into a new scheme (such as TPS). It does look like this option is now closed to you - there's another link here, in much the same vein as the one hyubh posted]

I think what you might be talking about is whether to opt out of accruing further benefits in the USS scheme, and start accruing new benefits in the TPS. Is that right?

Actually, I was in fact hoping I could still transfer accrued benefits too, but as you say it looks like this option is closed. Shame as I was beginning to think TPS would have been a better option. I guess I would lose out by opting out of USS and accruing new benefits in the USS? Again, thanks very much for replies

Simon979 · 1 August 2016 at 6:54PM

hyubh wrote: »

Just to be clear... are you saying the post-92 university participates in the USS, and allowed you to stay in it when you joined them? Was this a special TUPE+ arrangement...?

I was given the option when I joined (the post-92 uni) of staying with the USS or switching to TPS. As far as I know there was no special arrangement at the time, although this was before the USS came out of the Club earlier this year...

hyubh · 1 August 2016 at 7:55PM

Simon979 wrote: »

I was given the option when I joined (the post-92 uni) of staying with the USS or switching to TPS.

OK. Regardless of the fact it will be in the university's interests for you to join the TPS (as an unfunded scheme the question of deficit contributions doesn't arise), I'd personally move over, given the way the USS is going - having put its toe in the water of a hybrid DB/DC structure, I can see the DC tide getting to be nearer waist high in a few years (so to speak). Assuming money isn't ultra-tight, I wouldn't take much notice of the fact your TPS contribution rate will likely be higher, given the benefit package, overall, is a bit more generous, and more likely to stay that way (the USS has a flat 8% employee rate, the TPS a banded rate between 7.4% and 11.7%).

Also, assuming you joined the USS before 2011 (i.e., before April you were in the final salary section), am I right in understanding that you lost the final salary link in April? If so, then the obvious reason for staying in your current scheme, were the USS/TPS roles reversed, doesn't exist (when the TPS went CARE last year, existing members kept a final salary link for pre-2015 membership). Conversely, I wouldn't particularly worry about not being able to transfer your USS benefits into the TPS, given left where they are they attract a lower normal pension age (for example).

USS v TPS university pension

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