Eligibility and criteria

Eligibility

Active members of USS or the OSPS defined benefit section aged 55 or over with at least two years of qualifying service in the scheme may apply for flexible retirement.

  • Employees on variable hours contracts are excluded from flexible retirement.
  • There is no upper age limit to eligibility – an employee who has passed the normal pension age may still apply for flexible retirement.
  • The scheme applies differently to members of the OSPS defined contribution section: contact the Pensions team for information.

Criteria

Any request for flexible retirement should include:

            How much pension the employee wishes to take

  • The employee can ask to take between 20% and 80% of total standard pension benefits, in increments of 5%.
  • The employee may request two flexes before taking full retirement.
  • If the employee takes 80% of pension at the first flex, a second flex is automatically precluded – the next step is full retirement.
  • If the employee wishes to keep open the option of a later, second flex before full retirement, they may only take a maximum of 75% of pension at the first flex.
  • A second flex can request taking another portion of pension provided that, when added to the amount taken at the first flex, the total does not exceed 80%.
  • If the employee takes any pension before their Normal Pension Age (see the relevant pension scheme rules), the amount of benefit will be reduced for early payment. If the employee is a member of USS who joined USS before 1st October 2011, or is a member of OSPS who joined OSPS before 1st August 2004, the reduction will apply only if the employee takes pension before age 60. Employees should be encouraged to get pension forecasts from Pensions Office.

            By how much the employee wishes to reduce salary

  • The employee must reduce salary by at least 20%.
  • This may be achieved by the employee asking to work fewer hours, in steps equivalent to a half-day (i.e. 10% or 0.1 FTE for a full-time worker).
  • For a full-time worker a reduction in salary of 20% would be the equivalent of moving to a four-day week.
  • The necessary change in working pattern may also entail a change of role or grade (see Considerations).
  • The reduced salary (plus any general pay award) has to apply for at least 12 months.
  • A subsequent flex must include a minimum further 20% salary reduction.
  • USS multiple appointment members only - the employee must reduce the aggregate salary from all pensionable posts by at least 20% and this change in salary must be matched by a similar reduction in overall working commitments or hours.

There is not a fixed ratio between the amount of pension taken and the amount of salary reduction.

           

Date when the employee wishes to start flexible retirement

  • USS and OSPS require formal notification at least two months before the intended starting date of the flexible retirement arrangement, so it is imperative that the Pensions Office receives formal notification in good time to meet this pension scheme requirement.
  • A request for flexible retirement should therefore be agreed at least three months before the intended starting date.