1. Your pension changes
Bringing it all together

2. Purpose of today’s session

3. Aims of today’s session
Help you understand what’s changing
Look at how UBPAS will change
How the new scheme will run from January 2020
How you can take your benefits from both schemes
Answer any questions

4. What we will cover Sources of income in retirement State pension
Your University of Bristol Pension and Assurance Scheme (UBPAS) benefits and future options
Building up your University of Bristol Group Personal Pension (UBGPP) savings
How does the UBGPP work?
Creating a flexible retirement income
Next steps

5. ‘Breaking the Code’ – some of the terminology
“UBPAS” is a ‘DB scheme’ = a defined benefit / final salary pension calculated by reference to a formula (e.g. 1/80th), the years in the scheme and your salary at a given point
“True deferred” member – an ex-member of UBPAS who no longer works for the University
“Employed deferred” member – as above but who still works for the University
“Pensionable service” = the number of years in UBPAS
“UBGPP” = University of Bristol Group Personal Pension Plan – the new scheme available from 1 January 2020
UBGPP is a ‘DC scheme’ = defined contribution / money purchase. It’s a savings plan funded by contributions from you and the University – end benefit not known
NRD = normal retirement date

6. Sources of income in retirement

7. Sources of ‘retirement income’
State Pension
Other pensions
Part time work
UBGPP
Investments
(e.g. shares/ISAs/property)
UBPAS
(plus tax free lump sum)

8. State Pension

9. State Pension ages are changing
gradually increases
DOB before
6 April 1950
60 (women)
65 (men)
Born before
6 Dec 1953 65
(men & women now aligned)
Born between
6 Oct 1954
5 April 1960
Born after
6 April 1978 66 67
6 March 1961
5 April 1978 68

10. Check your State Pension by visiting:
The full State Pension currently provides £168.60pw (2019/20)
A reduction may be applied if:
You have fewer than 35 years’ National Insurance contributions (<10 years = no State Pension)
AND / OR
You have been contracted out of the Additional State Pension (previously known as S2P/SERPS)
Check your State Pension by visiting:

11. Your UBPAS benefits and future options

12. What is changing in January 2020?
UBPAS was reviewed in 2016, after which you consulted about changes to the benefits it would provide.
Following the consultation, it was decided that the UBPAS would close to future accrual* on 31 December 2019
(* this means your pension is calculated at this point rather than when you retire)
Until then, you remain an ‘active’ member of UBPAS.
On 1 January 2020 you become an ‘employed deferred’ member of UBPAS – but you will still have an ongoing entitlement to some of benefits (e.g. ill- health retirement options and spouse’s pension in the event of death)
You will then be automatically enrolled into the UBGPP, unless you decide otherwise.

13. UBPAS pre-February 2017 benefits
Benefits can be paid from age 60 without any reduction for members with 25+ years ‘Scheme Service’, or from the 31st July after reaching age 65 otherwise
1/80ths of ‘final pensionable salary’ up to 1 November 2013;
Either 1/80ths ,1/100ths or 1/110ths of ‘final pensionable salary’ (depending on your contribution: 17%, 11% and 9% pa respectively)
Tax free cash = 3 x pension
You could also pay Additional Voluntary Contributions and take this amount as tax-free cash or convert into additional Pensionable Service – subject to actuarial advice.

14. February 2017 to 31 December 2019 benefits
Tax free cash 3 x pension
Benefits can be paid from age 60 without any reductions for members with 25+ Years of Scheme Service or from the 31st July after reaching age 65 otherwise
Pension income built up on rate
Your contribution
1/150th 9%
1/135th
11%
1/125th
14%
1/110th
17%
1/100th
21%
1/80th
28%
UBPAS
You could also pay Additional Voluntary Contributions and take this amount as tax-free cash or convert into additional Pensionable Service – subject to actuarial advice

15. Considering a transfer away from UBPAS?
It’s a complex decision – take time to consider carefully and don’t be rushed
If you do transfer your benefits from UBPAS, you can’t transfer them back at a later date - so think carefully!
Whether a transfer is a good idea or not depends upon your personal circumstances and your attitude and ability to take risks
You will need to get help from an adviser authorised by the Financial Conduct Authority (FCA)
“When a firm ..is making a personal recommendation for a client who is, or is eligible to be, a member of a pension scheme with safeguarded benefits and who is considering whether to transfer, convert or opt-out, a firm should start by assuming that a transfer, conversion or opt-out will not be suitable”
(Source: FCA handbook)

16. Transferring out UBPAS…….be suspicious!!
If it looks too good to be true – it usually is!
Being approached unexpectedly by phone or text message
Pushy people claiming to be advisers
References to:
“pensions loan”
“savings advance”
“cashback from your pension”
Talk of:
loopholes, overseas investment, or new investment techniques
“others have already invested”
“the deal is only available for a short time – act quickly to get it now”
“the investment offers returns above the market rates”
If you’re suspicious, report it
FCA consumer helpline:

17. Death benefits Benefit Pre 1 January 2020 Post 1 January 2020
Active members of the UBPAS
Active members of the UBGPP
Employee who is an employed deferred member of the UBPAS (and has not transferred out) (In addition to UBGPP benefits)
Lump sum
4 x ‘Pensionable Salary’ at date of death (if no Spouse’s pension payable) 2 x ‘Pensionable Salary’ at date of death (if a Spouse’s pension payable)
Plus
Return of any employee contributions
Payments are usually tax free
Return of full UBGPP pension fund plus
6 x basic salary (irrespective of marital status) Subject to the insurer’s terms and conditions
Survivor pension
Spouse’s pension of:
2/3rds x prospective pension based on Pensionable Service to NRD (subject to a maximum of 40 years) and Final Pensionable Salary at date of death Additional children's pensions may be payable
Pension payments are subject to income tax
None
Spouse and children’s pensions payable as for an employed deferred member of UBPAS before 2020 but based on:
Pensionable Service to 31 Dec 2019 (subject to a maximum of 40 years); and
Final Pensionable Salary at 31 Dec 2019

18. Long-term incapacity benefits
Pre 1 January 2020
Post 1 January 2020
Active members of the UBPAS
Active members of the UBGPP
Employee who is an employed deferred member of the UBPAS (and has not transferred out) (in addition to UBGPP benefits)
Incapacity benefit
Ill-health pension
The rules are complex but in simple terms:
If after a period of absence and deemed to be suffering from ‘Partial Incapacity’ (i.e. unable to perform your normal occupation and serious impairment of earnings capacity) then immediate unreduced pension payable based on service at retirement date and Pensionable Salary at retirement date.
If deemed to be ‘Total Incapacity’ (i.e. unable to perform any other gainful or suitable employment in the foreseeable future) then immediate unreduced pension payable based on potential years’ service to NRD (subject to a maximum of 40 years) and Pensionable Salary at retirement date
Payable until death: payments may be suspended until NRD or reduced if you resume working or through recovery.
Payments are subject to income tax
Income Protection Insurance benefit aiming to provide:
50% x basic salary income; plus
10% x basic salary pension scheme contributions
Payable up to State Pension Age following 26 weeks of Incapacity commencing on or after 1 Jan 2020 (which prevents you from performing your occupation and you are not following any other occupation)
Subject to the insurer’s terms and conditions.
Benefit potentially payable until the earlier of recovery, getting to State Pension Age, death, end of fixed term contract, or working elsewhere.
The insurer may reduce the income protection payments if the combined ill-health pension and income protection benefit will exceed the insurer’s maximum income threshold.
Payments are subject to income tax and National Insurance
As pre 1 January 2020 but calculated with reference to ‘Pensionable Service’ and ‘Final Pensionable Salary’ at 31 Dec 2019
Payable until death: payments may be suspended until NRD or reduced if resume working or recovery.

19. How does the UBGPP work?

20. Joining the UBGPP
Employed deferred members of UBPAS automatically join the UBGPP. Benefits include:
Improved contribution structure
Enhanced employer contributions*
* For those UBPAS members who were active members immediately prior to the UBPAS closing to accrual.

21. Selecting your UBGPP contribution rate
You will be able to choose the level of contribution you want to make to the UBGPP from January 2020 (subject to a minimum contribution of 4%)
The level of contributions the employer makes will depend on your chosen contribution level and any enhancement you are eligible for as a result of your previous membership of the UBPAS
As a UBPAS employed deferred member enhanced employer contributions apply if you choose to contribute to the UBGPP at or above 9% (see the next slide for details)
You will receive a contribution option form in October after the last of these presentations
You will need to complete and return this form promptly so payroll can be set up to implement your chosen contributions from 1 January 2020
If you do not actively choose your UBGPP contribution rate you will be automatically enrolled at a contribution level of 9%

22. Contribution rates to the UBGPP
Contribution rates to UBGPP from 1 January 2020
Employee contribution rate
Employer contribution rate
Standard existing UBGPP options 4%
5.0% 5%
6.5% 6%
8.0%
7% +
9.5%
Enhanced options for UBPAS employed deferred members
9% to 10.99%
10.5%
11% to 16.99% This option is only available to UBPAS members who paid contributions of 11% or more of pensionable pay to UBPAS during the period 1 February 2017 to 31 December 2019
11.5%
17%+
This option is only available to UBPAS members who paid contributions of 17% or more of pensionable pay to UBPAS during the period from 1 February 2017 to 31 December 2019
12%   

23. Building up your UBGPP savings

24. Building up savings in the UBGPP
Lump sum up to 25% tax free
Your contributions
invested*
Tax-efficient growth
University contributions
Use the rest to generate an income or take a taxable lump sum
*Charges apply to the investments held in the UBGPP

25. What does the UBGPP with L&G look like?
It has its own microsite which you can visit now
The site shows the ‘four step journey’ from joining to taking benefits
There a link to ‘Manage Your Account’ (MYA) which contains planning tools plus lots of video interactive content
You activate MYA once you join the scheme
The ‘Document Library’ hold Key Features and Member guides etc as well as a ‘Financial Wellbeing’ link 
You’ll learn more about where contributions are invested closer to the joining date – but charges on the UBGPP are very competitive (c50% cheaper than the maximum permitted)

26. L&G online tools

27. Flexible retirement options

28. Taking your UBGPP benefits
Pension Pot
Remain Invested
Defer Income
Annuity
Cash Lump Sum
Drawdown Income
Taxable Income
Tax Free Cash

29. When will you take your UBGPP benefits?
The UBGPP could bridge the gap between retiring and receiving your UBPAS and / or State Pension
Before other pensions
Receive your UBGPP at the same time as other retirement income
With other pensions
Draw your UBGPP later in retirement or leave the proceeds to your beneficiaries
Later in retirement

30. Taking your UBGPP savings: ‘cashing out’
25%
tax free lump sum
75%
Taxable lump sum

31. Taking your UBGPP savings: ‘drawdown’
25%
tax free lump sum
Flexible
Make flexible withdrawals to create a taxable 'income’
Invested
Remaining amount is invested and can be drawn in the future as a taxable ‘income’

32. Taking your UBGPP savings: taking your lump sum in phases
25%
Of this withdrawal is tax free
Of this withdrawal is taxable
75%
Invested
Remaining amount is invested and can be drawn in the future

33. Taking your UBGPP savings: pension income
Buying a secure income for life (“annuity”)
Choose from options including
A guarantee period
Inflation linking
Spouse/partner pension
Receive up to 25% as a tax free lump sum
Buy an annuity with the remainder
The income you receive will be determined by your circumstances
This will provide a secure income throughout your retirement

34. Useful contacts Primary contacts: UBPAS Barnett Waddingham:
UBGPP
L&G Helpline:
University Pensions Team:

35. Use of our work Philip Audaer Principal 020 7432 6777
Prepared on 5 September 2019
This generic presentation should not be relied upon for detailed advice or taken as an authoritative statement of the law. If you would like any assistance or further information, please contact the partner who normally advises you. While this document does not represent our advice, nevertheless it should not be passed to any third party without our formal written agreement.