Universities Superannuation Scheme (USS)

From 1^st April 2016 the USS scheme became a hybrid pension scheme.

All members will be entered into the USS Retirement Income Builder, this is the defined benefit (DB) section of the scheme.

For information about the scheme refer to the current member guide USS Member guide.

• The defined benefit (DB) part of the scheme guarantees you a pension income when you retire for the rest of your life. You build up a pension of 1/85 of each year’s salary in this section of the scheme up to the salary threshold of £40,000 and  3/85^th as a tax free lump sum. 

If you earn over the salary threshold, your earnings above the threshold will go into the USS Investment Builder. 

• This section of the scheme is a defined contribution scheme (DC) where contributions are invested in one of a range of funds provided, which the member can choose from.  You can use the value of this fund to supplement your income from the Retirement Income Builder.  Contributions into the USS Investment Builder are from you (8%) and the employer (12%).

All members are entered into this version of the scheme, even if you have previous membership.  If you have service in the previous version of the USS scheme, service you accrued before April 2016 is not affected.

Contractual enrolment and salary sacrifice

Qualifying employees on a standard contract (not Zero hours/casual contracts) are automatically entered into the scheme from the start of their contract.

• Providing that you pay NI, you will  pay contributions via Salary Sacrifice.  Salary Sacrifice means that you will make NI savings on your contributions.  You can choose not to pay via Salary Sacrifice by contacting the University Pension Team for an Salary Sacrifice opt out form.   Contributions paid via this method are not refundable after 3 months, so those on a short-term contract (less than 2 years) may wish to consider a refund, could consider electing not to pay via this method. If this is the case, you will need to contact the Pensions Team for a form.

However, your USS benefits are still calculated using your full salary (up the salary threshold), before salary sacrifice.

Casual contracts

If you are on a casual/zero hours contact (variable time) you will only be entered into the scheme if you trigger eligible job holder status for auto enrolment.  You will be contacted if you are auto enrolled into the scheme. 

You can request to join at any point by emailing the Pensions Team. Your email must be from your own email address and must contain the following statement: "I confirm I personally submitted this notice to join a workplace pension scheme." You will be entered into the scheme from the next available payroll run.

Salary Sacrifice is not applied to contracts where earnings levels are below £12,570 per year. If you have a casual contract only, your earnings and eligibility for salary sacrifice will be assessed at the end of the tax year.

Membership certificates

Once you have become a member, you will receive a membership certificate within 10 weeks of joining the scheme. A detailed guide is available for members on the USS website - USS Member guide

Contribution rates

Employees pay 9.8% of their salary into the scheme as a contribution towards the cost of providing benefits.  If you are a UK tax payer, you’ll receive tax relief on your contributions.  For example,  if you make a contribution of £100, as a standard rate UK tax-payer this will cost you £80 from your take-home pay.  If you’re a higher-rate UK tax-payer the cost will be £60.   

The employer pays 21.6%.

The contribution rate is the same for both sections of the USS scheme. 

Paying more

You can also choose to increase the value of your retirement savings by paying more in to USS.

Any member can make additional contributions into the USS Investment Builder. See the USS website for more information. Applications for AVC’s will need to be made via myUSS

Opting out of the scheme

If within the first 3 months of joining the scheme you decide to opt out, you will be refunded all contributions via the payroll.

You must complete a valid opt out form and supply this to the Payroll/Pensions team.  A scanned copy is acceptable providing that the form has a signature on it. Please note: The date of opt out will be the date the form is received.

Leaving the scheme – (and employment)

Leaving the Scheme guide

We will notify the scheme once your final payment has been made. The scheme will contact you at your home address with your options.  There are no forms for you to complete, just ensure that we have any change of address that applies.

Retirement

Normal Retirement

The current normal pension age (NPA) in USS is 66. However, if you have service accrued before October 2019 you may have service accrued based on a NPA 65 or 60, depending on when you accrued benefits in the scheme. 

If you want to retire before the NPA, it may be possible under the scheme's early retirement terms. The earliest age you can retire is 55 but an early retirement reduction of approximately 4% will be applied to your benefits for each year you take your benefits before the NPA.  There are exceptions to this, for some former final salary section members.

Modellers on the USS website will give a good indication of the benefits you would receive, these figures will include any early retirement factors that may apply.

You cannot draw your pension and continue working unless you use flexible retirement.

Flexible retirement

Flexible retirement allows a member, with the Universities agreement, to take between 20% and 80% of your USS Retirement Income Builder savings as long as you agree to reduce your hours and salary by at least 20%.

You can take less than 80% of your benefits and flex in two stages and continue working.

Your pension may be reduced for early payment if you are taking it before the scheme's NPA. There are exceptions to this for some former final salary section members.

You cannot draw your pension and continue working unless you use flexible retirement.

Retirement benefits/quotes.

In the first instance, a member should use the modellers on the USS website to look at pension benefits. We can request a full formal quote if the date you are considering to retire is within the next 12 months, however, USS will only produce two quote in a 12 month period, so please consider this if you request formal quotes .

Please contact the University Pension Team if you require further information.

Maternity

For the first 39 weeks of maternity leave you will continue to pay contributions on the pay you receive. The University will maintain your contributions up to the full amount of your normal contributions you would have paid had you not been on maternity leave.

After 39 to 52 weeks: During this period contributions will cease. You can elect to repay these contributions once you return to work. Contact the Pension Team if you require further information on this option. If you choose not to repay these, you will have a reduction on the pension accrued for the year.

Change of Grade - Election to remain

If you are commencing a new role that moves you from grade 5 to grade 6 or above, you will be entered into USS. If you are a member of the LGPS scheme and this is the first time you will be in a position that is eligible for USS (grade 6 or above), you have an option to remain in the LGPS scheme providing that you meet the following criteria:

• You were active members of the Local Government Pension Scheme (LGPS) immediately before the position change.
• You have not held a grade 6 (or above) position at the University
• You have not been a member or opted out of the USS pension scheme previously.

If you wish to remain in the LGPS, you will need to contact pensions@lboro.ac.uk and complete an application form before the start of your new position.

Note
• This election can be made only once, and that it remains binding for as long as you remain in employment with Loughborough University.
• You will not be permitted to join USS in the future whilst employed at Loughborough University.

We cannot give financial advice, but the links below give further information about the schemes. Applications cannot be accepted after your new position has commenced.

https://www.uss.co.uk/for-members/youre-a-new-joiner

https://leicsmss.pensiondetails.co.uk/home/scheme-member/lgps/index.html