1. USS 2016 Proposed changes Eifion Morris, APMI Member Communications Manager

2. Agenda 1 2 3 4 5 6 7 Introduction Career Revalued Benefits – how it works Final Salary – how it works Proposed changes Defined contribution What next? Questions

3. Introduction USS’s Joint Negotiating Committee (JNC) have proposed a package of changes

4. Terminology Final Salary Service and salary at retirement Career Revalued Benefits (CRB) Salary each year Defined Contribution (DC) Investment fund

5. Final Salary How it works

6. Pension The calculation 1 80 th Service Salary Pension Tax Free £ 3 PLUS

7. Pensionable salary 2015 2002 RPI 2012

8. £ 31,740 £ 22,218 £ 28,566 £ 30,153 £ 36,500 £ 28,566 £ 34,914 £ 31,740 £ 33,327 £ 38,889 £ 36,501 £ 37,612 £ 40,000 Pensionable salary calculation 11 13 12 8 10 9 5 7 6 2 4 3 Retirement day Years to retirement £ 41,000 £ 30,318 £ 38,068 £ 35,468 £ 45,922 £ 34,655 £ 38,760 £ 36,887 £ 37,580 £ 39,982 £ 39,701 £ 39,857 £ 40,000 RPI Revalued salary

9. Career Revalued Benefits How it works

10. The calculation Year 3 Year 1 Year 2 Year 6 Year 4 Year 5 Year 9 Year 7 Year 8 Year 12 Year 10 Year 11 Each year your pension & tax-free cash are calculated and ‘banked’ 3 3 3 3 3

11. Salary Banked We now need to add increases ‘revaluation’ Example Pension calculation TOTAL : £2,131.25 pa

12. Banked Pension Example Inflation calculation TOTAL : £2,196.45 pa Tax-free cash of 3 X pension in addition

13. Proposed changes

14. Proposal

15. Existing Final Salary section 2016 FSAL CRB

16. Existing CRB section benefits 2016 CRB

17. Existing AVCs 2016 ?

18. Existing transfer-in 2016 CRB

19. New CRB section CPI CRB 1 75 th 18 % 8%8% £55K

20. Defined contribution

21. Defined Contribution section DC £55K CRB 12 % 8%8% 1 % +1 %

22. Tax free Defined contribution flexibilities 55yrs 100% Tax free ?

23. Assessing your own position https://www.ussconsultation.co.uk/members Comparison Tool

24. Assessing your own position

25. Other considerations £55K CPI

26. What next?

27. Amendments/approval Timetable 16 Mar’15 Late May’15 Before end of June’15 1 April’16 Employer consultation Implementation Feedback to Trustee Board

28. Your questions