Presentation for USS members Colin Busby and Eifion Morris APMI

1. Presentation for USS members Colin Busby and Eifion Morris APMI Your USS Journey Every effort has been made to present accurate information. Members are advised to check with their employer and/or the USS guides to confirm their understanding before acting on any information given. This presentation may be recorded for training and audit purposes.

2. The journey Travel safety Starting out and benefits Connections Upgrade Unscheduled events Reaching your destination Future plans Your questions

4. Is it safe to travel?

5. What about USS? • Extreme volatility of financial markets has an effect on USS investments • Long-term investor • Positive cash flow • Strong employer covenant • Last man standing • Pension Protection Fund

6. In the future • 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”

8. The basics

9. The calculation

10. The calculation

11. Part-time calculation 40 30 Salary £000s 20 10 3 years 10 years 10 years 5 years 100% 30% 100% 50% 40 10 20 30 Years

12. Part-time calculation

15. Transfers in to USS • Transfer previous benefits to USS • Beneficial Club transfers • Two year time limit on transfers from the Public Sector • Transfer request form • See factsheet 2

17. Increasing your benefits • Pension not enough? • Break in service, like maternity • Thinking of retiring early? • Save more

18. Options in USS • Two USS options for increasing your pension and/or tax-free cash • Added years AVC and/or • Money Purchase AVC (Prudential) • Other savings/investments available

19. Comparison

20. Example – before added years

21. Example – with 5 added years

22. Added years modeller

23. Prudential AVC calculator • Website www.pru.co.uk/uss

24. How to pay AVCs – Added Years

25. Remember… • 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 • More information in factsheet 1

27. Benefits for your dependants • Life assurance of 3 x salary • Income protection • Spouse/dependant/civil partner • Children • Update your beneficiary details • Death benefit nomination form (3 x salary) • Registration of financial dependant form (dependant’s pension)

29. Retirement options

30. Normal retirement • In accordance with the contractual retirement age stipulated in your contract of employment

31. 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 with employer consent • Minimum retirement age 55 from 6 April 2010

32. Incapacity retirement • Total incapacity or partial incapacity benefits • Factsheet 10

33. Varying pension and 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 • Add on any Prudential AVCs

35. Conversion example Annual Pension (AP) = £20,000 pa Standard tax-free cash (TFC) = £60,000 Capital value = £460,000 (20 times AP+TFC) Maximum TFC = £115,000 (25% of pension pot) Less standard cash = £ 60,000 Potential extra cash = £ 55,000 Your choices -Exchange pension for extra cash Pension = £ 16,391 pa Tax-free cash = £115,000

36. Conversion example Annual Pension (AP) = £20,000 Standard tax-free cash (TFC) = £60,000 Pru AVC fund (PRU) = £55,000 Capital value = £515,000 (20 times AP+TFC+PRU) Maximum cash = £128,750 (25% of pension pot) Less standard cash = £ 60,000 Potential extra cash = £ 68,750 Your choices Use Prudential AVC as extra tax-free cash and receive full pension Pension = £ 20,000 pa Tax-free cash = £ 115,000

38. Where next? • Keep your ticket • Pensions office contacts • Prudential – www.pru.co.uk/uss • USS website – www.uss.co.uk • Slides available here • Pensions TV