1. UBPAS Pension Consultation Meetings
14 October 2018
UBPAS Pension Consultation Meetings
Guy Gregory - HR Director
Andy Nield - Financial Advisor

2. 14 October 2018
Key Points
Pension provision remains an important part of the overall employment package at Bristol
UoB currently operates UBPAS, UBGPP and USS schemes
Defined benefit pension schemes such as UBPAS are under continuing and increasing financial pressure
Latest actuarial valuation of UBPAS:
Shows a significant increase in future service contributions required
Plus continuing deficit recovery plan payments by UoB of £6.9m pa
Overall financial sustainability of the Scheme is an absolute priority

3. 14 October 2018
Key Points
Keeping UBPAS open to future accrual in the longer term is no longer a viable option for the University
Option A ( agreed in principle with union representatives and UBPAS trustees)
UBPAS remains open to December 2019 then closes, but employee contributions/accrual need to change in the meantime.
Post closure of scheme enhanced ‘employed deferred member’ terms
Post closure members will join UBGPP on enhanced terms
Collective agreement to end the link with final salary
Option B
UBPAS closes to future accrual immediately. Link to final salary while in continuous employment with UoB remains.
Post closure of scheme normal UBPAS deferred member terms
Post closure members will join UBGPP on standard terms

4. 14 October 2018
Actuarial Reviews
Actuarial reviews are carried out at least every 3 years on all Defined Benefit (DB) Pension Schemes
Valuation is based on assumptions around future investment performance; discount rates; price and salary inflation; life expectancy etc.
Assets and liabilities reviewed to determine whether the Scheme is in surplus or has a deficit and agree any deficit recovery plan
Determine if changes to future service contribution rates required

5. UBPAS Actuarial Review History
14 October 2018
UBPAS Actuarial Review History £m

6. UBPAS Actuarial Review History
14 October 2018
UBPAS Actuarial Review History
2009
Agreed 20 year deficit recovery plan £5.0m pa
Scheme closed to new members
2012
Deficit recovery plan increased to £6.9m pa
Introduction of revised employee contribution/accrual rates
2015 draft valuation
Deficit recovery plan to continue at £6.9m pa
Significant increase in future service contributions required
Scheme in current format no longer viable

7. UoB financial impact Current cost of UBPAS to UoB:
14 October 2018
UoB financial impact
Current cost of UBPAS to UoB:
Future service accrual 13.2% = c£2.9m pa
Deficit recovery payments £6.9m pa
Total cost £9.8m pa
Potential future costs if no changes
Future service accrual 22.9% = c£5m pa
Total cost £11.9m pa
UoB has contributed c £47m of deficit recovery payments since 2009

8. Managing for the Future
14 October 2018
Managing for the Future
University commenced discussions with trade unions in February 2016
Having considered a number of options, two options appear viable:
Option A:
UBPAS remains open to December 2019 then closes, but employee contributions/accrual need to change in the meantime.
Post closure of scheme enhanced ‘employed deferred member’ terms
Collective agreement to end the link with final salary
Post closure members will join UBGPP on enhanced terms
Option B:
UBPAS closes to future accrual immediately. Link to final salary while in continuous employment with UoB remains.
Post closure of scheme normal UBPAS deferred member terms
Post closure members will join UBGPP on standard terms

9. Total pension benefits under Option A
14 October 2018
Total pension benefits under Option A
UBPAS
Accrued benefits to 31 January 2017 as current
Plus accrued benefits February 2017 to 31 December 2019 under new contribution/accrual rates
Employed Deferred member benefits post December 2019
Plus UBGPP (on enhanced terms) January 2020 onwards

10. What will it mean for the next 3 years…
14 October 2018
What will it mean for the next 3 years…
Current: Since Nov 2013
Option A: 1 Feb 2017 to 31 Dec 2019
Employee Cont. %
Benefit Accrual
£ mth
contrib 9%
1/150 75
11%
1/135 92
14%
1/125
117
17%
1/110
142
25%
1/90
208
28%
1/80
233
Employee Cont.%
Benefit Accrual
£ mth contrib 9%
1/110 75
11%
1/100 92
17%
1/80
142
Select
Example: £/mth Salary of £10,000 pa

11. What will it mean January 2020 onwards
14 October 2018
What will it mean January 2020 onwards
From 1 January 2020 all active members of the Scheme at 31 December 2019 will be classified as “Employed Deferred”
Employed Deferred members will retain some benefits in UBPAS which are not available to ordinary deferred members
These enhanced benefits are only available while they remain in continuous employment
Future pensions contributions made into UBGPP

12. Contribution rates in UBGPP from 1 Jan 2020
14 October 2018
Contribution rates in UBGPP from 1 Jan 2020
Category
Employee rate
Employer rate
Standard existing UBGPP options 4%
5.0% 5%
6.5% 6%
8.0%
7% +
9.5%
Enhanced options for UBPAS employed deferred members – if the proposal is accepted 9%
10.5%
11%
UBPAS contribution at least 11% during 2015 to 2019
11.5%
17%
UBPAS contribution at least 17% during 2015 to 2019
12%
Insurance/other benefits
1.5%

13. UBGPP: Example Pensionable Salary at 1 January 2020
14 October 2018
UBGPP: Example
Pensionable Salary at 1 January 2020
Contribution rates %
Gross contributionpaid into UBGPP (£)
Projected UBGPP fund value at NRD (£)
Employee
Employer
3% return pa
5% return pa
7% return pa 9%
10.5%
39,000
53,180
66,070
82,690
10,000
11%
11.5%
45,000
61,360
76,240
95,410
17%
12.0%
58,000
79,080
98,260
123,000
Above is an illustration of how members investments in UBGPP can grow
The example assumes the member retires after contributing for a period of 20 years. For simplicity the pensionable salary and rate of contributions remain fixed at the same level.

14. 14 October 2018
UBGPP
At retirement it would be your decision as to how to take your UBGPP benefits.
One option would be to use the accumulated fund to buy a life-time pension (know as an annuity) .
The example on the following slide is for a fund value of £100,000
The example is based on annuity rates available in the market over the last 12 months
Note: UoB, trade unions and the UBPAS Trustees are not able or authorised to give you financial advice in connection with the changes. The examples are intended to be a helpful guide, you may wish to consult an independent financial adviser.

15. UBGPP: Example Annuity Rates
14 October 2018
UBGPP: Example Annuity Rates
Terms of annuity benefits purchased
Approximate range of initial pension that could have been purchased with a fund value of £100,000 in last 12 months
Increases to pension in payment
Spouses benefits payable on members death
None – a fixed member pension
None
Between £4,000 - £5,100 pa
A pension of 50% of the members pension at death
Between £3,700 - £4,700 pa
In line with RPI
Between £2,150 - £2,700 pa
Between £1,900 - £2,400 pa

16. 14 October 2018
Option B
Option A is the preferred option and has been agreed in principle with union representatives
To implement Option A a collective agreement with recognised trade unions is required
If Option A is not agreed then UoB would propose to implement Option B:
UBPAS closes to future accrual on 1 February 2017 and active members become normal deferred members of UBPAS
Final salary link remains post closure of scheme to future accrual
Members transfer to UBGPP on the terms currently available to new employees – no enhancement

17. 14 October 2018
Formal Consultation
Under Pensions law and regulations, the University must consult if they wish to make significant changes to the Scheme, including:
Closing the Scheme to new members or future accrual
Increasing employee contributions
Changing the basis or rate of benefit accrual
Formal 60 days consultation period therefore commenced on 22nd September 2016
Letters, booklets, website, box available
Closes on 23rd November 2016
Will consider all feedback from the consultation…

18. 14 October 2018
Next Steps
… Will then reach a final decision after the expiry of the consultation period…
… Will meet with the trade unions to advise them of the decision taken …
… Active members of UBPAS will be notified shortly afterwards including details of decisions that they will need to make for implementation on 1 February 2017

19. 14 October 2018
Questions?
We invite questions that Members may have following this presentation
FAQ’s are available online at