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Presentation for USS members Colin Busby and Eifion Morris APMI

Presentation for USS members Colin Busby and Eifion Morris APMI. Just the ticket. Is my pension safe?. Extreme volatility of financial markets has an effect on USS investments USS is a long-term investor Positive cashflow Strong employer covenant Last man standing

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Presentation for USS members Colin Busby and Eifion Morris APMI

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  1. Presentation for USS members Colin Busby and Eifion Morris APMI Just the ticket

  2. Is my pension safe? • Extreme volatility of financial markets has an effect on USS investments • USS is a long-term investor • Positive cashflow • Strong employer covenant • Last man standing • Joint Review Group formed by employers and UCU 'to determine what changes should be made to ensure USS remains an attractive and affordable defined benefit pension scheme'. • Pension Protection Fund

  3. The journey The basics Life events Improve your benefits Your questions

  4. The basics = 1 80th x Pensionable Salary x Years of membership

  5. Full-time pension calculation % of salary

  6. Part-time calculation • Total service: 10 + 3 + 10 + 5 = 28 years • Total pension: 1/80 x full-time salary x 28 40 30 Salary £000 20 10 100% 30% 100% 50% 40 10 20 30 Years

  7. Benefit modeller

  8. Varying your pension & cash • Vary the cash • No cash and higher pension • Higher cash and lower pension • Maximum 25% of capital value • Multiply your pension by 20 • Add on tax-free cash • Rough guide: 5.75 x ‘standard’ pension

  9. E.g. using factor of 15.24 (male aged 65): £1 pension gives extra £15.24 cash, or £15.24 of cash would provide extra £1 pension Cash conversion factors Female 65 = 16.89 60 = 19.34 55 = 21.69 Male 65 = 15.24 60 = 17.86 55 = 20.33

  10. Benefit conversion modeller

  11. Retirement options • Early retirement between 50 & 60 due to redundancy or at request of employer • pension not reduced for longer payment • based on service at that date unless compensation available • Employer pays ‘funding charge’ • From age 60 in accordance with contract or with employer’s consent • Minimum retirement age 55 from 6 April 2010 • Incapacity retirement • total incapacity or partial incapacity benefits • more information in Factsheet 10

  12. Pension increases Pension increase history

  13. Things to do sooner, not later Update your beneficiary details • Life assurance of 3 x salary • Income protection for those closest to you • spouse/dependant/civil partner • children • MO1 – for lump sum death benefits (3 x salary) • MO3 – register a dependant (dependant’s pension) Investigate a transfer to USS • MO16 – transfer request form • (two year time limit on transfers from the Public Sector) Consider if you’re saving enough towards retirement

  14. Increasing your benefits • Pension not enough? • Thinking of retiring early? Two USS options for increasing your benefits • Added years AVC and/or • Money Purchase AVC (Prudential) • Tax relief on both options • All extra payments must go through payroll • Other savings/investments available

  15. Added years AVCs • Final salary benefit • Secures extra years and days USS service • Final benefits dependent on pensionable salary at retirement and service purchased • Maximum additional 15% of salary contribution to added years • Changes to payment amount requires new contract

  16. Added years modeller

  17. Money Purchase AVC facility - Prudential • Retirement benefits dependent on • amount invested • investment choice/performance • cost to buy retirement benefits at retirement • Contributions up to 100% of gross taxable pay • Tax-free cash (25% of fund and possibly 100% at retirement) • Fund can be used at retirement to buy years and days service from USS • Flexible contributions

  18. Additional Voluntary Contributions • AVCs are not the only way to save for retirement • AVC funds cannot be accessed before retirement • USS cannot advise you which option to choose

  19. More information • Pensions TV • Joining • Leaving • AVCs • Overseas • Transfers-in • Maternity leave • Absence • Website - www.uss.co.uk • Member guides • Service statements

  20. Contacts • Pensions office contacts • USS website –www.uss.co.uk • Slides available here • List of financial advisers under ‘Planning’ section • Prudential • Websitewww.pru.co.uk/universitiesavc • Helpline0800 515 914 Every effort has been made to present accurate information and members are advised to check with their employer and/or the USS guides to re-affirm their understanding before acting on any information given.

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