USS 2016 Proposed changes Eifion Morris, APMI Member Communications Manager

USS 2016Proposed changes

Eifion Morris, APMIMember Communications Manager

Agenda

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Introduction

Career Revalued Benefits – how it works

Final Salary – how it works

Proposed changes

Defined contribution

What next?

Questions

Introduction

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

Terminology

Final Salary

Service and salary at retirement

Career Revalued Benefits (CRB) Salary each year

Defined Contribution (DC) Investment fund

Final SalaryHow it works

Pension

The calculation

1

80th

Service Salary Pension

Tax Free

£3PLUS

Pensionable salary

20152002

RPI

2012

£ 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

RPIRevalued salary

Career Revalued Benefits How it works

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’

33333

Salary Banked

We now need to add increases ‘revaluation’

Example

Pension calculation

TOTAL : £2,131.25 pa

BankedPension

Example

Inflation calculation

TOTAL : £2,196.45 pa

Tax-free cash of 3 X pension in addition

Proposed changes

Proposal

Existing Final Salary section

2016

FSAL CRB

Existing CRB section benefits

2016

CRB CRB

Existing AVCs

2016

?

Existing transfer-in

2016

CRB

New CRB section

CPI

CRB

1

75th 18%8%

£55K

Defined contribution

Defined Contribution section

DC £55K

CRB

12%8%

1%+1%

Tax free

Defined contribution flexibilities

55yrs

100% Tax free

?

Assessing your own position

https://www.ussconsultation.co.uk/members

Comparison Tool

Assessing your own position

Other considerations

£55K

CPI

What next?

Amendments/approval

Timetable

16 Mar’15

Late May’15

Before end of June’15

1 April’16

Employer consultation

Implementation

Feedback to Trustee Board

Your questionsYour questions