Transcript Document

USS Employer Consultation
Information session
May 2015
USS Employer Consultation
Information session
May 2015
USS CONSULTATION
Information session overview
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Background
USS information video
Recap of key proposed changes
Example
Questions
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Background
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BACKGROUND
Timeline
 January
 9-13 March
 16 March
 22 May
 31 May
 June/July
 Autumn
 April 2016
proposals agreed by JNC
delivery of consultation material
to relevant staff
start of employer consultation
consultation ends
employers report to USS
Trustee considers responses
communication of agreed
changes
earliest implementation date
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BACKGROUND
Terminology
• Defined benefit
• amount paid in retirement is based on a formula
linked to salary and years worked
• retirement income can be calculated in advance
• Defined contribution
• fund builds up depending on
– what you pay in
– the fund’s investment performance
• amount payable in retirement depends on fund
value, therefore not certain in advance
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USS information video
https://www.ussconsultation.co.uk/members/videos
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Recap of key proposed
changes
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KEY CHANGES
Benefits built up before change
• Benefits built up before change are protected
• Final salary
– pensionable salary & service at day before
implementation used to calculate benefits
• Career revalued benefits section
– built up benefits value as at day before
implementation
• Built up value is revalued until retirement, in
line with official pensions
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KEY CHANGES
Future scheme
• On portion of salary up to £55k
– defined benefit
– career revalued benefits basis
– for every year you work you get
• 1/75 of salary as a pension (previously 1/80)
• 3/75 of salary as a lump sum (previously 3/80)
– 8% employee contribution
(was 6.5% CRB, 7.5% FS)
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KEY CHANGES
Future scheme
• On portion of salary over £55k
– defined contribution
– 8% employee contribution
(was 6.5% CRB, 7.5% FS)
– 12% employer contribution into fund
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KEY CHANGES
Future scheme
• Additional defined contribution option
– all members can contribute to a defined
contribution fund regardless of salary level
– up to 1% employee contribution will be
matched by employer
– employee can pay more if they want
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KEY CHANGES
Future scheme
• Employer contribution to USS 18%
(was 16%)
– regardless of salary threshold
– regardless of matching any optional employee
contributions to defined contribution fund
– minimum employer contribution of 18% will
apply up to 31 March 2020
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Example
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EXAMPLE
Jeanie McTavish
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45 years old
In Final Salary scheme
20 years’ service built up by 31 March 2016
Planning to retire at 65
Current salary £15,000
Not expected to change grade before
retirement
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EXAMPLE
Jeanie McTavish
• Estimated changes to pension
– current arrangement £7,110 a year
– proposed arrangement £7,410 a year
– £300 a year estimated INCREASE
• Estimated changes to lump sum
– current arrangement £21,330
– proposed arrangement £22,220 a year
– £900 estimated INCREASE
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USS CONSULTATION
Where to find out more
www.ussconsultation.co.uk
– Interactive modeller
– Detailed consultation material
– Q&As
Ask the University Pensions team:
[email protected] x2611
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BACKGROUND
Timeline
 22 May
 31 May
 June/July
 Autumn
 April 2016
consultation ends
employers report to USS
Trustee considers responses
communication of agreed
changes
earliest implementation date
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USS CONSULTATION
Questions?
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