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 Colin Busby and 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

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

What will I get? %19%25%31%38%44%50%56% Years’ service Pension as % of salary If salary was £40,000 with 30 years service benefits:- Pension of 30/80 X £40,000 = £15,000 pa PLUS Tax-free cash of 3 X Pension = £45,000 Full-time member

How big will your pension be? Average service 32 years X 1/80th Average salary £42,000 pa Average pension £16,800 pa

Getting more out of USS

Put more in to get more out Added years Money purchase Up to £50,000 paTax reliefFlexibilityTax-free cash15% maximum £Tax reliefCertaintyTax-free cash

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 Lifetime Allowance £1.5 million wef April 2012

USS tax options

Added years modeller

Money Purchase AVC calculator

Money Purchase AVC early exit charge Only applies to:- new accounts, AND Only if funds withdrawn within 5 years of opening account Does not apply:- death incapacity retirement fund switches

Money Purchase AVC fund early exit charge Year of withdrawal% of fund withdrawn During Year 115% During Year 210% During Year 38% During Year 46% During Year 55% During Year 6 onwardsNo charge

How to pay AVCs Use modeller on Contact Pensions Office Added Years 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 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)

Salary £50,000 Pension at 65 £25,000

What if you leave?

Benefits on leaving More than 2 years service? Pension = Service/80 X final pensionable salary 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? Final salary section if within 30 months and benefits left in USS Re-link earlier membership

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 Pre October 2011 benefits in full All benefits in full if 55 or more on 1 October 2011 Employer consent from 60 Until 1 October 2013 no reductions apply Redundancy Benefits in full Severance 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

Flexible retirement Subject to consent of employer and USS 2 months’ notice required by USS Flexible retirement from age 55 Hours must reduce by at least 20% Draw up to 80% of benefits (minimum 20%) Early retirement reductions apply before age 60 2 ‘Flexes’ possible, 3 rd is full retirement If you flex, you continue to build up further benefits on a part-time basis and remaining benefits based on future full-time equivalent pensionable salary You continue to build up benefits

Incapacity retirement Pension based on service to 65 Total incapacity Pension based on service already earned Partial incapacity

Varying pension and cash No cash and higher pension Higher 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 Benefits earned before 1 October 2011 no cap Benefits since 1 October 2011 capped Service before 1 October 2011Since 1 October 2011 Matches official pensions with no capMatches up to 5% 5% plus 50% of increases above 5% Overall ceiling of 10% pa

Pensionable Salary Calculated in most favourable wayBased on last 13 years’ salary historyAll salaries indexed by RPIBetter of: Best 12 months in last 36, or Best average over 3 years falling in last 13 years

Pensionable salary calculation Retirement40000X193.5/193.5= X193.5/188.6= X193.5/182.6= X193.5/177.9= X193.5/174.3= X193.5/171.6= X193.5/166.5= X193.5/164.5= X193.5/159.5= X193.5/153.8= X193.5/149.8= X193.5/145.2= X193.5/ YearSalaryRPI increase Revalued salary = Back