uss member presentation - keele university · builder (db) uss investment builder (dc) automatic...

USS Member Presentation

Purpose

My Benefits My Actions

My Questions

The over £55,000 section

USS Retirement Income Builder

USS Investment Builder

USS Retirement Provider

1.

2.

3.

What’s the name of the new defined contribution section in USS?

4.

USS for the future

Types of retirement benefits

Defined Benefit (DB)


Defined Contribution (DC)

USS InvestmentBuilder

Benefits up to 31 March 2016

Final Salary (FSAL) or Career Revalued Benefits Section (CRB)

Statements of benefits at 31 March 2016 in Autumn

USS pension increases

2016


Cap to increase may applyIncreases match Official Pensions

5%

CPI

5%

USS

2.5%

7.5%10%15%

10%

Phased implementation

1 Apr 2016

Sala

ry £

000s

1 Oct 20160

20

40

60

80

100

USS Retirement Income Builder (DB)

USS Investment Builder (DC)

Automatic for salaries of £55,000 and over

With the option to makevoluntary contributions and choose the match

USS Retirement Income Builder (DB)

With the option to make voluntary contributions to the

USS Investment Builderand choose the match

£55,000

£55,000

2016 2017 2018 2019 2020

Salary threshold

or = based on FULL salaryDeath benefits Ill-health benefits


x =USS pension

increasesSalary (up to threshold)

EVERY year

xBuild up

rate Pension

Tax-free cashPension

=3x+

1/75 £

Salary 1/75 of salary every year


(assuming 2% a year)Banked

£30,000 1/75 x 30,000 x 1.02 x 1.02 x 1.02 £424.48

£40,000 1/75 x 40,000 x 1.02 x 1.02 £554.88

£50,000 1/75 x 50,000 x 1.02 £680.00

£60,000 1/75 x 55,000 x 1 £733.33

Total: £2,392.69 pa

PLUS tax free cash of £2,392.69 x 3 = £7,178.07


1/75£

Higher rate tax payers

Everyone

People earning above the salary threshold (£55,000)

Post October 2016 joiners

1.

2.

3.

Who is the USS Investment Builder relevant for?

4.

USS Investment Builder - What is going in?

The match – pay more get more

+1% 1%

You contribute an additional

or more of your salary

Your employer also contributes an additional

You can choose to pay more, but your employer will only match the first 1%

of your salary

INTO THE USS INVESTMENT BUILDER

Extra contributions: example

Salary = £35,000

Per month You Pay Automatic Tax Relief

(assuming basic rate tax payer)

Your payment into


Employermatch into


Totalinto USS

Investment Builder

Your first 1% £23 £6 £29 £29 £58

Your next 1% £23 £6 £29 - £29

Register with My USS

You have to register with My USS to pay extra contributions

Register with My USS online

Automatic membership

+8% 12%

You contribute

of your salary above the salary threshold

Your employer contributes

This is in addition to your benefits in the USS Retirement Income Builder

of your salary above the salary threshold

INTO THE USS INVESTMENT BUILDER

USS Investment Builder - What happens to

my money?

Choosing your USS Investment Builder investments

How do I decide where my money

is invested?

vDo it for me Let me do it

Do it for me

The Default fund

The fund designed by the Trustee to

meet the requirements of most members

Do it for me

The Default fund (A Lifestyle fund)

There is also an Ethical Lifestyle

Fund

Let me do it

Subsidised fund management charges

Contribution 5% pa return after 20 years

0.5% pa charge

5% pa return after 20 years

No charge

Difference

£1,000 £2,410 £2,650 £240

Fund management charges reduce the return you get on your investments… so they will be subsidised on the

USS Investment Builder funds

USS Investment Builder - What do I need to do?

Your choices

You can make changes to contribution amounts and funds

Opt into the match

Elect to pay more than 1% if you

wish

Choose your funds

(or default lifestyle)

Register with My USS

You have to register with My USS to make your investment choices


USS Investment Builder - What comes out?

USS Investment Builder flexibility

Pension

Leave funds invested

From age 55

Cash

USS Investment

Builder

Tax-fee cash

Benefit illustrator

Get the 1% match

Subsidised fund management charges

Potential to take fund tax-free

All of the above

1.

2.

3.

What is the advantage of saving via the USS Investment Builder?

4.

Existing Additional Voluntary Contributions

(AVCs)

Types of existing AVCs

Added years/benefits

Money PurchaseAVCs

with Prudential

Added years/benefits

Nonew arrangements

Old arrangements cancontinue

Money purchase AVCs

Action needed to continue to pay extra contributions from

1 October 2016!

STOPMoney purchase AVCs

with Prudential

Extra contributions from 1 October 2016

All other Prudential funds

Prudential With-profits funds


?

What happens to money purchase AVCs?

Prudential With-profits AVCs will say where they are

All otherPrudential funds


What happens next?

What happens next?

Register with My USS to get the match, pay extra contributions and make your investment choices


Where to get further information

USS Scheme information and latest newsuss.co.uk

USS For the FutureSite dedicated to the 2016 scheme changes (including benefit illustrator) forthefuture.uss.co.uk

Pensions Advisory ServiceGeneral guidance on pensionspensionsadvisoryservice.org.uk

Money Advice ServiceFor general financial guidance including pensionsmoneyadviceservice.org.uk

Pension WiseNew government site focussed on defined contribution pension savingpensionwise.gov.uk

Independent Financial AdvisersLook for “chartered advisers” onlyunbiased.co.uk, findanadviser.org

Taking action

The match

Default fund

The change to Prudential AVCs

1.

2.

3.

What’s the most important message from today for YOU?

4.

Important notice

This presentation and any comments made during thepresentation and responses to questions are for generalguidance only. The presentation is not a legal document anddoes not explain all situations or eventualities. USS is governedby a trust deed and rules and if there is any difference betweenthis publication and the trust deed and rules the latter prevail.Every effort has been made to present accurate information atthe date of publication and members are advised to check withtheir employer contact for latest information regarding thescheme, and any changes that may have occurred to its rulesand benefits.

Appendix –Extra Information

Transfers-in

Non-club transfers to buy benefit• No new requests until 1 October 2016

31 March 2016

Up to 1 October

2016

1 October 2016

onwards

Membership of ‘transfer club’ ended from 31 March 2016 •Transition (2 years)•Based on pensionable salary as at 31 March 2016

1 October 2016 onwards = USS Investment Builder

uss member presentation - keele university · builder (db) uss investment builder (dc) automatic...

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