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. Presentation for USS members Eifion Morris APMI

Agenda 1 How much will your pension be? 2 Getting more out of USS 3 Keep your house in order 4 What if you leave? 5 When can I stop working? 6 Questions?

How much will your pension be?

The basics

The calculation Each year your pension & tax-free cash are calculated and ‘banked’

What is salary? Your contributions each year (1 April to 31 March) Divided by the contribution rate (6.5%) Salary to work out pension

Working out the pension £2,6006.5% £40,000 pa 1/80th£40,000 £ pa

Example We now need to add increases ‘revaluation’

What does ‘Revalued’ mean? Pension calculated each year & ‘banked’Increases applied to pension earned

Example Tax-free cash of 3 X pension in addition

Getting more out of USS

Put more in to get more out Revalued Benefits AVC 15% maximum £Tax reliefCertaintyTax-free cashLong-term saving Money purchase Up to £50,000 paTax reliefFlexibilityTax-free cashLong-term saving

Help from the tax man £100 from net pay Pay £125 Invest £125 (returns dependent on investment) Retire

Help from the tax man £100 from net pay Pay £166 Invest £166 (returns dependent on investment) Retire

Tax allowances Annual Allowance £50,000 pa 1 year of service X salary of £210, pa Plus Money Purchase AVC contributions £40,000 pa wef April 2014 Lifetime Allowance £1.5 million Pension of £65,217 pa £1.25 million wef April 2014

USS tax options

Added years modeller

Money Purchase AVC calculator

How to pay AVCs Use modeller on Contact Pensions Office Revalued Benefits Contact Prudential directly Personal consultation Money Purchase

Keep your house in order

Transfers in to USS Transfer previous benefits to USSBeneficial Club transfers Two year time limit on transfers from the Public Sector Treated as ‘Final Salary’ benefits Transfer request form –

Benefits for your dependants Life assurance of 3 x salaryIncome 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)

Dependant’s pension – how much? Pension earned in last 12 months Multiplied by years until age 65 Add to pension already earned Then, it’s a % of that figure

Dependant’s pensions Spouse/Civil Partner 50% of projected pension Children 2 or more children 75% of projected pension 1 child 37.5% of projected pension

What if you leave?

Benefits on leaving More than 2 years service? Pension earned to leaving date Plus 3 X Pension as cash Increases apply up to retirement Less than 2 years service Refund of your contributions (except salary sacrifice) less tax and NI Pension based on your contributions only

Options after leaving Transfer out? At any time To any UK and many overseas schemes Full value of benefits Draw at retirement Plus deferred pension increases from leaving to retirement Rejoin? Re-link to earlier membership and add to deferred pension

When can you stop working?

Normal retirement Retirement at the Normal Pension Age applicable No ‘early retirement’ reductions NPA to increase in line with State Pension Ages 1 October timetable to be announced for increase to State Pension Ages Retirement before NPA will be classed as early retirement but only in respect of service after any increase

Future increases to NPA % % 96% 65 October 2020 NPA increases to 66

Early retirement Reductions apply for each year earlier than Normal Pension Age Own choice Until 1 October 2014 no reductions apply Redundancy Take some of your pension and keep working, reductions may apply Flexible retirement Income if your ability to work is limited by ill-health Incapacity retirement

Varying pension and cash less cash and higher pension More cash and lower pension Vary the cash Multiply your pension by 20 Add on tax-free cash Add on any Prudential AVCs Maximum 25% of capital value

What next?

Pensions office contacts Prudential – – USS website – –Slides available here –Pensions TV

Your questions

Pension increases In line with ‘Official pensions’ Civil Service, NHS, Teaching etc Consumer Price Index used as measure of inflation Increases are capped Pensions increases Matches Official pensions up to 5% 5% plus 50% of increases above 5% Overall ceiling of 10% pa