USS Fact sheet
USS is the University's scheme for those of its staff who are on academic and academic-related scales of pay. USS is a national scheme open to all such employees of UK universities.
From 1 October 2011, the USS pension scheme will have two sections:
Both sections are 'defined benefit' which means the benefit you receive is worked out using a known formula.
- You are an employee of the University;
- You are on an academic or academic-related scale of pay;
- Your employer says your job is pensionable.
If you join the University on or after 1 October 2011, and you have not been a member previously, you will be admitted to the Career Revalued Benefits section of USS.
- left USS before 1 October and have deferred benefits in USS and are rejoining before 1 April 2014; or
- leave the Final Salary section after 30 September 2011 and rejoin the scheme within 30 months of leaving.
USS is approved by the Inland Revenue and is contracted-out of the State Earnings Related Pension Scheme (SERPS).
Members of USS are sent an Explanatory Booklet which provides a more detailed explanation of the scheme, the key features of which are detailed below.
Contributions
Normal Contributions: Your contribution for the Final Salary section is 7.5% of your pensionable salary (usually basic salary) and the cost for the Career Revalued Benefits section is 6.5% of your pensionable salary (usually basic salary) . Your employer pays a variable amount (presently 16% of the total of members' pensionable salaries) to USS in order to fund the balance of the cost of the benefits.
Additional Voluntary Contributions (AVCs): You may increase your retirement benefits by paying AVCs. The options available are:
- purchasing additional pensionable service in USS, thus boosting your USS benefits,
- building up a capital sum in a "money purchase" facility provided by Prudential, or
- building up a capital sum in a "Free Standing AVC" facility with the provider of your choice.
The most you can pay, including your normal contributions, to purchase additional pensionable service in USS, is 15% of your earnings in any tax year.
You can pay all your remaining salary, after deduction of your normal pension and National Insurance contributions, into the money purchase scheme provided by Prudential.
Important: Your contributions to USS qualify for tax relief at your highest marginal rate. The relief is given at source through the payroll. Contributions paid to a Free Standing AVC arrangement are not usually deducted through Payroll, so do not attract tax relief at source. Your Free Standing AVC provider can tell you more about how you obtain tax relief on these contributions.
Benefits
The principal benefits are:
Final Salary Section
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A Pension, payable at retirement at the rate of 1/80 x salary for each year of pensionable service, together with
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A tax free Cash Lump Sum, of three times that pension.
Career Revalued Benefits Section
- A Pension, calculated at the end of each scheme year, payable at retirement at the rate of 1/80 x pensionable salary.
- A tax free Cash Lump Sum, of three times that pension.
Other benefits are:
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Early Retirement on the grounds of ill health (after 2 years of contributory service). Members who satisfy the Trustee Company (USS Limited) that they are permanently incapable of continuing in their present or comparable employment owing to ill health, become entitled to an immediate pension and cash lump sum calculated on their current salary and prospective pensionable service to normal retirement date.
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A Death-in-Service Cash Lump Sum, equal to three years' salary, payable to a person or persons chosen at the discretion of the Trustee Company. The Trustee Company will take into consideration persons previously nominated by the member. Nomination Forms are available from the Pensions Office or from your Administrator's office. Important: If your circumstances change, please remember to update your nomination by completing a new form.
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A Dependant's Pension, payable upon death to a surviving spouse or other dependant at the rate of either:
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on death in service, half the pension that would have been payable had the member retired on the grounds of ill health on the day before death,
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on death of a preserved pensioner before retirement, half the preserved pension, or
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on death in retirement, half of the pension in payment.
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Up to two Child Allowances, payable on behalf of any of the member's children under the age of seventeen or remaining in full-time education at the date of death. The amount payable to each child is 75% of the dependant's pension.
Note:
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All pensions and child allowances, up until 30 September 2011, are increased annually in line with the increase in the Retail Prices Index (RPI). For benefits built up after 30 September 2011, USS will match increases in official pensions for the first 5%. If official pensions increase by more than 5%, then USS will pay half of the difference up to a maximum increase of 10%. Official pensions are those for public sector schemes like NHS, Teachers and Civil Service.
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All benefits are subject to limits imposed by the Inland Revenue. Generally, the limits will apply only if you have more than 40 years' pensionable service in the Scheme.
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Nothing stated in this summary can override the Rules of the Scheme.
Further sources of information
Explanatory Booklet: As mentioned earlier, all members of USS are sent an Explanatory Booklet, which provides a more detailed explanation of the scheme.
Scheme Address: The registered office of the Trustee Company, to which enquiries about the scheme or about an individual's entitlements should be sent, is: Universities Superannuation Scheme Limited, Royal Liver Building, Liverpool L3 1PY.
Visit the USS website