Whatever plans you have for your retirement, sometimes it’s out of your control.
If you are currently paying contributions to the scheme, have more than 5 years’ calendar-length membership and are made redundant, or if your employer asks for you to retire, USS provides you with your pension in full. This is based on the service you have built up in the scheme and your pensionable salary at retirement.
However, please note that the earliest age at which you can retire (excluding incapacity retirement) is currently 50 and from 6 April 2010 will be age 55. If you are made redundant and have been in continuous membership of USS from 5 April 2006 to 6 April 2010 and beyond you will still be entitled to receive your pension as long as you are age 50 or more.
Most pension schemes, when paying a pension early, will reduce the amount of that pension because you are receiving the benefit earlier than expected. But in the situations outlined above this doesn’t happen in USS. Your employer pays extra funds into the scheme to cover the cost of providing your full early retirement pension.
If you retire after age 60, with the consent of your employer, you are still entitled to your full pension,and there is currently no extra cost to your employer.
Choosing not to draw your pension
It’s not compulsory to take your pension if you are made redundant or asked by your employer to retire, although if you don’t plan to return to a USS institution and rejoin USS it probably makes financial sense to do so.
However, you may wish not to draw your pension in anticipation that you’ll obtain further work within higher education and be able to rejoin USS and build up further benefits. If you decide not to draw your pension and things don’t work out as planned you, are still entitled to draw your pension, in full, before your contractual pension age
Early retirement reductions in some cases
Deferred benefits
If you leave for other reasons and decide to draw your pension prior to age 60, then this is at the discretion of USS. Any pension paid may be reduced, depending on your contractual pension age in your last USS post and also the period that your membership spanned. Please refer to the leaver booklet or factsheet eight for full details. This also applies if you were made redundant but at the time you were not old enough to receive your retirement pension.
If you would like a quotation of your retirement benefit please apply in writing to USS for the attention of the Deferred Retirement Team.
Please note that the earliest age at which you can retire (excluding incapacity retirement) is currently 50 and from 6 April 2010 will be age 55. However, if you are made redundant and have been in continuous membership of USS from 5 April 2006 to 6 April 2010 and beyond you will still be entitled to receive your pension as long as you are age 50 or more.
To qualify for payment of your full deferred benefits on the ground of redundancy, you must have been over age 50 when you left the scheme and either:
However, if you were over age 50 at date of leaving, had less than five years pensionable service and were made redundant, you may apply for early payment subject to reduction.
If the trustee company agrees to any early payment of your benefits, and they are to be reduced the reduction is currently about 4% for each year taken early.
Early payment of benefits transferred to USS
Transfer values agreed before 1 April 2009
Benefit for any service transferred to USS may be actuarially reduced, in certain circumstances, in the event of your early retirement before age 60, other than on grounds of ill-health.
This reduction applies:
• If the transfer payment is received by USS within one year of you joining the scheme then the transferred in service will be reduced if you retire with less than seven years active membership since joining.
OR
• If the payment is received by USS more than one year after joining then the transferred in service will be reduced if you retire with less than seven years active membership since the payment had been received (although a period of six months is discounted for administrative time taken to complete the transfer).
This condition applies to all transfer quotations (except bulk transfers – see next heading). The reduction would be applied only to the benefit for the service transferred in, irrespective of whether or not the remainder of your USS pension has been reduced for early payment.
Transfer values agreed on or after 1 April 2009
If you agreed a transfer-in to USS on or after 1 April 2009, the benefits granted will be payable in full from age 65. If you draw these benefits early, except in the case of incapacity retirement, the benefits in respect of the transfer-in will be reduced for the years and days earlier than age 65.
The exception for transfers held by the scheme for more than seven years applying to transfers agreed before 1 April 2009 does not apply to transfers agreed after 1 April 2009.
See Factsheet two – Transferring benefits to USS from other schemes for full information.