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Rediscovering SAUL Understanding and appreciating your pension scheme

Rediscovering SAUL Understanding and appreciating your pension scheme. October 2010. Agenda. Introducing the Scheme The cost Your benefits Funding. Introducing the Scheme. Set up in 1976 for non-academic staff of the University of London Sole Trustee and Administrator 30,000 members

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Rediscovering SAUL Understanding and appreciating your pension scheme

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  1. Rediscovering SAULUnderstanding and appreciating your pension scheme October 2010

  2. Agenda • Introducing the Scheme • The cost • Your benefits • Funding

  3. Introducing the Scheme • Set up in 1976 for non-academic staff of the University of London • Sole Trustee and Administrator • 30,000 members • 50 Employers

  4. Occupational Pension Scheme Employers Trustees Pension Scheme • 5 appointed by the University of London • 4 appointed by your recognised trade unions Employees • 3 co-opted

  5. Defined Benefit Scheme • Simply the benefits you receive are defined in the scheme rules - You know what you’ll get when you retire Benefits (Liabilities) • Contributions FUND (Assets)

  6. Final Salary Scheme Benefits are based upon: • Salary at or near the date of you leave or retire • Your length of service in the Scheme

  7. The Cost 13% of salary Employees Employers 6% of salary Employees • For each £1 contribution you pay 20p (or 40p) less tax • You pay1.6% less in National Insurance contributions on earnings between £4,940 and £40,040

  8. Example: earning £24,000 pa Difference of £70.58 or 3.5% of salary

  9. Your benefits Pension • 3 x Annual Pension Pensionable Pensionable Salary x Service 80 Lump Sum

  10. Definitions Pensionable Salary is usually salary paid in the last 12 months of service Pensionable Service in years and days • SAUL service • Transfer in credits • AVC credits Full-time Equivalent (for part-timers)

  11. Example Calculation Pensionable Salary: £40,000 pa Pensionable Service: 20 years £40,000 x 20 = 80 £10,000 x 3 = £10,000 pa Pension £30,000 Lump Sum

  12. Flexibility • Normal Pension Age is 65 – but you can retire: • From age 50 or 55 with a reduction • From age 60 with no reduction • Commutation of your pension or lump sum

  13. Family Protection • Income • for • Spouse • Children 2/3rds member’s pension Lump sum 4 x salary (in service) Return of contributions (in deferment) 5-year guarantee (retirement)

  14. Your benefits on leaving SAUL Defer your Pension Until you wish to retire Index linked Transfer out Refund of Contributions if under 2 years service

  15. Other advantages Additional Voluntary Contributions • Contribute up to an additional 10% of salary • Pay by lump sum or monthly • Purchase added years Public Sector Transfer Club • Roughly equivalent benefits

  16. Funding The Actuarial Valuation • Assets and liabilities • Assumptions Funding level • £1,391 million (31 March 2010) • 90% (technical provisions) • 74% (secondary funding objective)

  17. The future Pension Increases: CPI Funding shortfall • Increased longevity • Lower investment returns Addressing the shortfall • Recovery Plan • The Negotiating Committee

  18. More information • Benefit Statement • Your benefits guide • Your Pensions Officer • The SAUL website: www.saul.org.uk

  19. Questions

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