As a Chartered Financial Planner, Carole Nicholls is a member of the panel approved to advise USS members
USS is the recommended occupational pension scheme for academic and academic related staff.
USS is a final salary, contracted out occupational pension scheme. Contributions are 6.35% of pensionable salary. Members get tax relief at the highest level on their contributions and pay a lower rate of National Insurance.
More information including a complete guide to benefits can be found on the USS website and in their booklet : USS – An Introductory Guide for New Members.
Benefits
A brief description of the benefits provided by USS are as follows:
- Basic benefits are calculated based on the number of years service up to a maximum of 40 years, and broadly speaking the final years’ salary. There is also a tax free lump sum of three times the pension.
- A member retiring with the maximum 40 years service and a final salary of £30000 would expect to receive:
- 40 years/80 of £30000 = £15,000 annual pension plus a tax free lump sum of £45,000.
- A member on the same salary with 20 years service would expect : 20 years/80 of £30000 = £7500 Annual Pension plus a tax free lump sum of £22,500.
- USS pensions are increased annually in line with the Retail Prices Index.
Additional voluntary contributions (AVCs)
Members with potentially less than the maximum 40 years service may have the option of increasing their USS service by paying AVCs. This can be done either by regular monthly deductions or a lump sum payment at the end of the tax year. They can also make extra provision by making payments to the Prudential where they build up a fund of money that is used to purchase an annuity (a pension) at retirement.
Ill-health retirement
Members are covered for ill-health retirement once they have two years service, service transferred in counts towards the two years.
Death in service
Cover for death in service begins on the first day of membership. A tax free lump sum equal to three times salary is payable. There is also provision for a spouses pension plus annuities for up to two qualifying children.