uss pension reddit

Thanks, good to know I'm not totally bonkers thinking this! I'm assuming they had to re-evaluate things based on the covid dip but it does seem rather silly and hopefully it will go back down due to the covid recovery. We use cookies on our websites for a number of purposes, including analytics and performance, functionality and advertising. Imagine a DC scheme with those contribution levels where you could choose the funds, you'd make way better than USS is forecasting. Is it worth somebody with previous time on the scheme (who now no longer contributes due to different employment) transferring to something like a Vanguard SIPP? If you can make more money elsewhere then consider leaving. 1001127. However, I'm still optimistic about hitting 1.5% (after fees) long term real return (which should make the transfer more than worthwhile). I’ve been in a similar situation and doing similar calculations as OP. If you do not qualify for a Canada Pension Plan benefit, Canada will consider your periods of contribution to the pension program of the United States as periods of contribution to the Canada Pension Plan. If you can beat that you can beat the benefits of the USS. It will be hard to judge how much better it will be. In terms of next steps, there will be a consultation organised by Universities UK (UUK) starting later this month which will provide all USS employers with the opportunity to comment on ways to address the scheme’s high opt-out rate and the sizeable deficit, including covenant support measures, affordable benefit structures and changing contribution levels. There is practically no period in history when real returns where less than 4 percent over a stretch of 30-40 years. It's still a good pension and I'll keep paying in because the employer contribution makes it worthwhile, but at this point, yeah, it's getting borderline and I'd be much happier to take my and their contributions and DIY it. There is an element of that already for some of us - I pay into a DC scheme because my salary is over the threshold. For the USS in particular, discount rates have halved in the matter of a few years as market gilt yields have catastrophically - for pension funds at least - fallen with QE. Basically, assuming the CETV is really 30x I am considering ignoring conventional wisdom and rolling the dice. Full details here: Currently: Combined contribution rate is 30.7% Members pay 9.6% of salary Employers pay 21.1% As of October 2021: Combined … It's an odd siutation to be in as should I be caring about the now or the future. General wisdom is to advise AGAINST transfers out of DB on the basis they are guaranteed inflation linked values paid in annuity. To meet all its current pension promises, the USS says, would require the combined employer and employee contribution rate to rise from 26 per cent of salary to 33 per cent. That’s quite a challenge year in year out. I assume, sadly, that this is the younger members subsidising final salary pensions for the older cohorts who have lived longer than expected. If that happened in one go, universities and academics between them would have to find £700 million more a year, equivalent to 8 per cent of the universities’ annual income. and yes the short answer is that they have a huge deficit and due to low interest rates transfer values are at the highest they have ever been... i work in the recruitment side of a financial advisory so my knowledge is limited but i obviously listen to these sort of conversations on a daily basis, and you are definitely thinking in the right direction. They cannot do better than the market and they must charge higher fees than passive funds to pay for all their managers. However, I noticed a news article mentioning USS has a big deficit and I suspect they might offer enhanced transfer values for people like me. ): As you may have seen, we have now heard from USS about the outcome of the 2020 valuation. Anyone able to share their advice? I think the valuation from 2020 is depressed due to the fact that the financial year end is 31/03 which is obviously when there were the big dips due to covid. Honestly, they're just better off making it DC at this point. I'm really thinking about just setting up a private pension or paying into a S&S ISA instead (already maxing out my LISA for retirement too). If so, come along to a one-hour presentation by Kevin Painter from Mercer on either 30 June or 18 July. The employers have said that they want to close the USS defined benefit pension (DB) scheme to future accrual, which means that new members will not be allowed to join, and existing members will not be able to contribute any more into it than they have already built up. Followup: My CETV was only 25x. Imagine a DC scheme with those contribution levels where you could choose the funds, you'd make way better than USS is forecasting. I'm not a member, but even if the contribution rate was to rise a bit it still seems look a good deal to get that guaranteed income and have no risk of market movements in retirement. In addition, the final pension received under the career average system would be cut by 6 per cent under the proposals, Times Higher Education understands. The USS pension scheme has proposed a change from the defined benefits (DB) model to the defined contributions (DC) model. There are circumstances where they’re likely to be suitable including serious ill health where there are no dependants eligible for a survivor pension. I'm in the exact same position. I am 30 and really do worry about the future, as much as I try not to. Both doesn't look like an option. Thanks. Nonsensical and just another way young people are getting screwed by the already retired. Older threads typically suggest transfer is not worth the loss of guaranteed income. The CETV would definitely be over £30k and I've learned financial advice is actually compulsory for that... and it won't be cheap! Even 1% real return and 3.5% draw down would give me +40%. It does seem silly though to base this on a valuation report done with depressed values due to Covid. A ~£3k IFA fee is quite punitive and transferring is also a hassle. For example, a researcher joining USS at 38 with a 30 year career will receive more than £200,000 less in the USS scheme than they would in TPS over an average retirement. It's not totally clear to me where next 30 years' growth will come from. This app provides some projections that shows the likely impact on future performance for these different models. This is a subreddit to discuss all things relating to gaining financial independence and retiring early (FIRE) with a focus on the UK. I wish we were given the option to use a different pension scheme and still have some form of employer contribution and salary sacrifice, not just have the only option be the USS. I very much struggle to understand why the USS would be able to offer better returns than the market and offer lower costs than someone like Vanguard. Big decision and you’ll need advice to release funds in any case. I think I did the maths once and it was barely better to keep paying in than just take my contribution and invest myself on average, even assuming some quite pessimistic long term growth with a self-invested pension, but obviously you're protected from risk with this and there's the life insurance etc. At the rate we're going, we'll soon be contributing 20%+ of our salaries. To leave, the university has to pay its entire liability so that's not affordable either. USS Employers is a site owned and managed by Universities UK, the nominated formal representative for over 340 employers in the Universities Superannuation Scheme. Click for printable PDF. We have been surprised and disappointed that the USS report is even more challenging than we had expected. You’ll have your own view on whether you wish to take the CETV and take the investment risk. With more than £60 billion ($78 billion) in assets, the USS is the largest private sector pension scheme in the United Kingdom. Honestly they've lost their minds. USS and Thames Water. The USS Trustee, which is responsible for the scheme, is deciding how much money needs to be paid into it to maintain the current level of defined benefit pensions. … The valuation is a joke and the employers seemingly think so as well. Suggested changes could equal nearly £1k post tax for me lost to pension costs. Share on Reddit. I'm single with only myself to fall back on, no-one else to turn to, and so financial security is really important for my likely long old age (women in my family live into their 90s). 2517018. Too young and trying to save for a house. I'm just feeling very chastened. The USS pension fund deficit is not exactly news, but the latest round of headlines only adds to the stink of intergenerational unfairness that surrounds universities. One thought is that 80s onwards have been roughly: abundance of oil, cheap manufacturing in Asia and efficiency gains from technology. Older threads typically suggest transfer is not worth the loss of guaranteed income. Why not do it yourself? You’ll certainly have more flexibility but generally I see advice that you have to be able to clear 5% net of fees to make it worthwhile. That means conservative choices. I am an economist and have been staring at historical (200-300 years+) interest rate data from around the world for a long time. Universities now make a contribution of 18% of salary, up from 16%, for each scheme member and will continue to do so. However much they've jerked around with USS, it's still a better deal than other pension … It has been submitted to … Universities Superannuation Scheme (USS) is one of the largest private pension schemes in the UK with £60 billion in assets. However, I think the cost of that security would fall on young academics (postdocs, new lecturers etc) and having been there don't like the thought of leeching off them. I'd also have the option of taking some at age 55 (although rules may change by then..). I find the USS communications fairly impenetrable and my AVCs (halted for the moment while I pay childcare fees) aren't going up in value. Assuming 30x CETV now, 2.5% real return in SIPP (i.e. The Universities Superannuation Scheme is a pension scheme in the United Kingdom with over £67 billion under management as of March 2019. The USS Trustee has proposed three illustrative scenarios for the outcome of the 2020 valuation, two of which will require higher levels of covenant support from employers, such as pledging assets and/or contingent contributions. You should get your quote and come back with what they say. (I would also get financial advice but prefer to spot big holes before getting that far :)), If anyone had a USS (or similar) CETV quote recently please share (understand if you prefer not though :)), Given low interest rates (and therefore bond rates) CETVs will be very high right now. Press J to jump to the feed. Unless I'm mistaken, the next 30 years would have to be unprecedentedly bad to leave me significantly worse off. Appendix: technical details USS is a very healthy pension scheme. It’s changing to aged 57 in 2028, and will be likely be later by the time you get there. Why should tPR be intervening in what is fundamentally a matter of reward? The pension fund issue was a big factor in Carillion going bust. Press question mark to learn the rest of the keyboard shortcuts, https://www.uss.co.uk/for-members/articles-for-members/2021/03/03032021_valuation-update-for-our-members. True. As a member you will accrue: 1. a pension of 1/75 of your salary for each year of pensionable service up to a salary threshold 2. a cash lump sum of 3/75 of your salary for each year of pensionable service, up to a salary threshold 3. a money purchase pot in the USS investment builder for some of the contributions paid over the salary threshold The salary threshold is £59,585.72 from 1 April 2020. Update: Friday 13 April 2018Statement from the University and College Union:The USS consultation closed at 2pm today. I am thoroughly pissed off about this, even if it is entirely unsurprising and we all could've seen it coming a mile off. I'm really concerned about the rate at which contributions are increasing and what this means in the long-term. The modeller should be used in conjunction with other available information when making decisions about your pension arrangements. For members of USS, what are your thoughts? USS Investment Management’s Steve Deeley, and Thames Water’s Head of Sustainability, Richard Aylard, explain why USS first invested and the long-term partnership that has developed to enable the company to effectively manage future challenges such as climate change. If you are a current USS member and have received a benefit statement you can login to the illustrator below using your eight digit USS member number. I think it’s worth getting a transfer value from USS each year to explore options as this problem persists. Furthermore, the OSPS and OUP pension schemes at Oxford already operate on the basis of defined contributions. If I were to invest 42.1% of my salary for the rest of my career in sensible ETFs I'd have an insane pension pot. Unless my salary is going to somehow increase to cover the rise I'm really not sure what to do. means the USS Plan for Employee Pension Benefits (Revision of 1950), as amended. I'm 31 but due to delaying pension contributions to save up for a house, I started paying when I was 29, so about 2 years into it now. Members interested… The number I get is 1.2% annual real returns. These valuations are nonsense. USS are just bonkers. Am I missing something obvious? I think the scheme would be closed to new accruals rather than than happening. My institute had a pay freeze last year and I’ll be lucky if I get 1% for the next few years so massive increase in pension contributions will be really tough! It's making our already underpaid sector even less attractive of a place to work. Define USS Pension Plan. USS pension presentations. USS - For the future Welcome to the Benefit Illustrator, designed to provide you with an estimate of your USS benefits at retirement. If you gave me 40% of your salary and asked me to invest it for the next 25 years, I could do a lot better than what they're offering. I have a DB pension (USS). As an employer, the University provides USS with the information they need in order to maintain your pension record, and the USS team are here to field In all three scenarios benefits would remain the same but there would be significant increases to the current total contribution rate of 30.7% of salary (21.1% paid by the employer and 9.6% paid by the member). The Government Pension Getting a monthly check the rest of your life sounds really great in theory. I have a DB pension (USS). More posts from the UKPersonalFinance community, Discuss, learn and request help on how to obtain, budget, protect, save and invest your money in the UK, Press J to jump to the feed. Let's say I'm 35 and have a nice round 30 years till 65. Since then they've risen considerably, so it seems to me that the valuation paints a gloomier picture than necessary. We hope that all USS eligible staff will engage with the consultation. Welcome to the USS The Universities Superannuation Scheme (USS) is specifically designed for all Academic and Academic-related members of University and College staff, and is administered centrally by the USS in Liverpool. That's possible of course! USS DB offers inflation proofing and general security. USS invested in the UK’s largest water company, serving 15m customers, in 2017. I was only a postdoc and my CETV is ~£50k. Hopefully things have picked up this year. Pension cuts dressed up as “liability reduction exercises”? Miss out on salary sacrifice (e.g. In 2008 the scheme … Surely contributions can't continue to increase so what's the end game here? Oxford have just shared this with staff (note, one outcome is contributions of 56% of salary!! Full details here: https://www.uss.co.uk/for-members/articles-for-members/2021/03/03032021_valuation-update-for-our-members, Combined contribution rate is due to rise to 34.7%, Combined contribution rate is due to rise to (at least) 42.1%, It doesn't say what members will pay, but based on Oct 2021 proportions, this could mean an increase to 13.3% to members and 28.8% for employers. The Canadian pension programs included in the Agreement are the Canada Pension Plan (CPP) and the Old Age Security (OAS) program. I only just submitted a CETV request but already trying to run some numbers. I pay as much as I can, or the scheme limits will let me. It also provides the results for the Post 92 Teacher Pension Scheme (TPS) for comparison. USS faces the risk that it will become a decisively inferior package to the Teachers’ Pension Scheme, which staff in new ‘post-92 universities’ pay into. I hope so anyway, because I don't think the employers would stand for the combined contribution rising to 42%. The valuation was done using market data from March 31st 2020, when asset prices were still down after the coronavirus crash. Just to add, you definitely won’t be able to take it at 55. These scenarios will now be discussed by the Joint Negotiating Committee (JNC). 5% nominal and 2.5% inflation) and then 4% draw down from age 65, the income would be 2.5X of my inflated DB amount. I think most universities will seriously think about a switch to a different scheme, it’s unaffordable! 40x plus should be expected. 23 Responses to “USS changes — don’t be fooled” Chris Says: March 12, 2015 at 11:39 pm | Reply. The USS is a multi-employer pension scheme for around 350 organisations, of which the University of Sussex is one. USS membership. Now academics have both low salaries and a "meh pension" in the UK - what's the attraction? The long term (~30 year) investment risk is a struggle to evaluate TBH. The three illustrative scenarios are as follows: one in which, based on the current employer covenant support commitments, the total contribution rates increase to 56.2% of salary; another which is based on an illustrative package of covenant support commitments suggested by Universities UK (UUK), who represent employers, in which contribution rates increase to 49.6% of salary; the most favourable scenario presented, which would require further financial commitments from employers to strengthen the scheme’s covenant, and has an increase in the overall contribution rate to 42.1% of payroll. Would you like to learn more about the changes to the Universities Superannuation pension scheme (USS)? It’s just genuinely how much it costs USS to meet the expected liabilities for you. In an FT article from 3 years ago someone mentioned a 33x CETV [edit: 51x on MSE thread https://forums.moneysavingexpert.com/discussion/6045374/another-cetv-thread , which would be a no-brainer I think ] , which already seems high (and conditions now for DB pensions seem to imply a higher valuation). The valuation would have improved because bonds have got less valuable (higher yields) since March 2020. I am. USS, as an independent private company, remains based in Liverpool – a location chosen primarily due to proximity to the consulting actuaries and the solicitor to the scheme. You can transfer out. Quote was only 25x. My colleagues overseas have transferred to SIPPs and have received high transfer values. One annoying issue is that apparently you require IFA advice for CETV> £30k. RG: When I arrived, about 8% of USS’s portfolio was in private equity, infrastructure funds, and property. However, I’ve always wondered what the breakeven would be between choosing to work for the government and receiving its pension versus going private sector. Threat to the defined benefit pension scheme. obviously get professional advise before making any decisions.... All consultations with financial advisors are free so id say quiz them until you are comfortable.

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