1. 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

2. 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?

3. How much will your pension be?

4. The basics

5. The calculation

6. Part-time calculation 100%30%50%100% Years 10 20 30 40 10 20 30 40 Salary £000s 10 years 3 years 10 years 5 years

7. What will I get? 1015202530354045 13%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

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

10. Getting more out of USS

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

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

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

14. Tax allowances Annual Allowance £50,000 pa Lifetime Allowance £1.5 million wef April 2012

16. USS tax options

17. Added years modeller

18. Money Purchase AVC calculator www.pru.co.uk/uss

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 Money Purchase AVC early exit charge Only applies to:- new accounts, AND Only if funds withdrawn within 5 years of opening account Does not apply:- death incapacity retirement fund switches

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 Money Purchase AVC fund early exit charge Year of withdrawal% of fund withdrawn During Year 115% During Year 210% During Year 38% During Year 46% During Year 55% During Year 6 onwardsNo charge

21. How to pay AVCs Use modeller on www.uss.co.uk Contact Pensions Office Added Years Contact Prudential directly Personal consultation 0800 012 1262 Money Purchase

22. Keep your house in order

23. Transfers in to USS Transfer previous benefits to USSBeneficial Club transfers Two year time limit on transfers from the Public Sector Transfer request form – www.uss.co.uk

24. 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)

25. Salary £50,000 Pension at 65 £25,000

27. What if you leave?

28. 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

29. 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

30. When can you stop working?

31. Normal retirement Retirement at the Normal Pension Age applicable No ‘early retirement’ reductions NPA to increase in line with State Pension Ages 1 October 202066 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

32. Future increases to NPA - 66 100% 65 100% 96% 65 October 2020 NPA increases to 66

33. 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

34. 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

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

36. 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

38. What next?

39. Pensions office contacts Prudential – www.pru.co.uk/usswww.pru.co.uk/uss –0800 012 1262 USS website – www.uss.co.ukwww.uss.co.uk –Slides available here –Pensions TV

40. Your questions

41. 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

42. 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

43. Pensionable salary calculation Retirement40000X193.5/193.5=40000 238889X193.5/188.6=39982 337612X193.5/182.6=39857 436501X193.5/177.9=39701 534914X193.5/174.3=38760 633327X193.5/171.6=37580 731740X193.5/166.5=36887 830153X193.5/164.5=35468 928566X193.5/159.5=34655 1036500X193.5/153.8=45922 1131740X193.5/149.8=41000 1228566X193.5/145.2=38068 1322218X193.5/141.830318 YearSalaryRPI increase Revalued salary = 41663 Back