UASLAS University of Aberdeen Superannuation & Life Assurance Scheme AGM – Questions and...

UASLASUniversity of Aberdeen Superannuation & Life Assurance Scheme

AGM – Questions and Answers9 June 2015

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Please note

Responses are necessarily general in some cases If you require a specific response to a query, please

contact the Pensions Office.

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Question 1

What is the impact of Auto-Enrolment on the Scheme?

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Question 1

Up to April 2015, 458 new members had joined the Scheme since 1 May 2013

In the same period, 155 members have opted out of the Scheme

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Question 1 (continued)

Scheme remains healthy

Additional benefit accrual but...

...additional member and University contributions

Contribution rates based on pensionable salary roll so increase (or decrease) with changes in active membership

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Question 2

How will the voluntary severance exercise impact on the Scheme?

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Question 2

The voluntary severance scheme opened in March 2015 and is expected to run to July 2015

The aim of the exercise is for the University to reduce staffing costs

Members taking voluntary severance will no longer accrue benefits in UASLAS

In some cases, members may receive enhanced early retirement terms in UASLAS. Any additional benefits will normally be funded by employees giving up part of their Voluntary Severance lump sum to ensure there is no detrimental impact on funding

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Question 3

Can you confirm that the pre 1994 pension members are still entitled to take their full pension without detriment at the age of

60?

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Question 3

Yes– Documented in Scheme Rules– Also noted in member guide and factsheets found on

the UASLAS website– Part of early retirement provisions

Male pre 1994 members– Applies to benefits for service from 17 May 1990

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Question 4Given the new government legislation allowing access to whole pension as a

lump sum – would our pensioners qualify for this?

If not how much of our pension can we take out as a lump sum, and is the extra

amount tax free?

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Question 4

“Let me be clear: no-one will have to buy an annuity.”

Defined Benefit schemes – not directly affected– Possible side-effect: transfers (non-pensioners)

Defined Benefit changes– Trivial commutation (taxed)

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Question 4 (continued)

...how much of our pension can we take out as a lump sum, and is the extra amount tax free?

No change to lump sum options / tax-free cash limits

Already retired?

Not yet retired?– Contact pensions office

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Question 5

What is the total value of our pension pot and how is that calculated?

Will it potentially have tax implications for members?

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Question 5

UASLAS is one big pension pot - individuals are not assigned pots of their own

The UASLAS assets are used to provide all of the benefits promised to members

The UASLAS assets consist of regular contributions plus investment returns

Members can, however, take a transfer value if they wish to move to another arrangement

The transfer value represents the best-estimate of the value of benefits promised in UASLAS

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Question 5

25% of benefits are tax-free – usually taken in the form of a lump sum

The remainder of your UASLAS benefits are taxable at your marginal tax rate. You may pay more tax if you continue to work in retirement

Total value of benefits at retirement exceeding £1.25m is subject to tax

Reducing to £1m from April 2016 – equates to pension of £43,478 p.a. and lump sum of £130,440