FAQs 

First contact the person who deals with pension matters where you work.  If you still need help, get in touch with us directly: Universities Superannuation Scheme, Royal Liver Building, Liverpool L3 1PY. Email: postbox@uss.co.uk. Tel. 0151 227 4711 or 0845 068 1110 (local rate call charge number) Fax: 0151 236 3173.

Please tell your employer, or us, about any address changes or other personal details so that our records are accurate and so there is no delay in our communications with you.

If you are receiving a pension from USS, you can email the payroll department directly through payroll@uss.co.uk

Your employer provides you with a pension based on your salary close to retirement. This type of scheme is called a final salary scheme. The pensions built up are financed by a fund to which all employers participating in USS contribute.

Final salary schemes like USS are regarded as the best type of pension you can get.

Every month your employer pays the most towards your retirement – a sum currently equal to 16% of your salary.  You pay 6.35%, but get tax relief on this amount, reducing the real cost by at least 20%.   In addition, you pay lower compulsory National Insurance contributions because you are not paying into the State Second Pension Scheme, and you don’t pay any tax on the cash benefit of your employer’s contribution.

Other company pensions, known as “Money Purchase” or “Defined Contribution” schemes are different.  While employers and employees also both usually pay into these plans, the pitfall is that you take the risk that there will finally be sufficient money in it for a decent pension.  Your retirement income depends on the ups and downs of the stock exchange and how financial markets are performing just at the time you decide to stop work.

Part-time employees are usually automatically eligible to join USS if you meet the normal membership criteria e.g. under age 60 when joining, in an appropriate pensionable post, not a USS pensioner.

You may also be able to join USS if you are employed irregularly, if your employer agrees. To qualify as this kind of employee (what we call “variable time”) your pay must not be based on a fixed annual or part-time basis. You are not automatically made a USS member if you fit into this category.  You must ask to join.

USS takes the final decision as to whether someone is a “variable time” employee or not. For more information go to factsheet twenty-one

USS membership is voluntary but, because of the high quality benefits, it is assumed you will join unless you say otherwise in writing before you start work.  But you can, of course, change your mind and withdraw without penalty, if you do so with 3 months of joining.

You are usually automatically eligible to join USS if you meet the normal membership criteria e.g. under age 60 when joining, in an appropriate pensionable post, not a USS pensioner.  This includes part-timers.  For more information go to question "What about the benefits for part-timers and people who work irregularly for a USS institution?”. Check with your employer directly about USS membership status.

Every month your employer currently pays a sum equal to 16% of your salary to USS and you contribute 6.35% of your monthly salary. So after only a short time this has a value.  Remember, as a USS member you get immediate life insurance cover at no extra cost. You also pay lower compulsory National Insurance contributions towards the government’s State Second Pension scheme.

If after joining USS, and later deciding to change your mind, you can simply stop paying in, just give 28 days notice to your employer.

If you change jobs, and/or leave USS, you won’t lose the value of all the contributions put into the scheme.  If you move to another USS participating institution, which means most UK universities, your membership is simply transferred and your benefits continue.

You have three choices as to what to do if you stop being a member of USS.

Option 1

If you leave USS within two years of joining, you can usually get a cash refund of your contributions, less certain tax and National Insurance deductions required by law.

Option 2

Just leave everything in USS as a “deferred pension benefit”, payable when you retire. Meanwhile, it will continue to increase in value in line with the Retail Price Index. You may be paid the benefits earlier then when you would normally retire e.g. through permanent incapacity.

Option 3

Simply transfer the full cash value of your USS benefits straight into another approved pension arrangement e.g. a new employer’s scheme, a personal or stakeholder pension or a buy-out policy.

Note: If you leave after you have been a USS member for longer than two years, you cannot take a cash refund.  You can only choose between options 2 and 3 above.

For financial details and calculations go to leaving the scheme page.

You can usually move your USS pension benefits to an overseas scheme. Transfers from overseas pension schemes may also be possible.  A number of technical formalities and tax issues that needed to be checked are included in our Factsheet two. For more information, please contact USS.

USS is one of the largest pension schemes in the country with assets of many billions. It was established in 1975 by the university sector collectively to provide high quality pensions and peace of mind protection for employees.

There are, therefore, no shareholders and no dividends to pay out.  There are no commission or set-up administration charges and no exit fees to pay if you transfer your pension somewhere else. USS exists solely for the benefit of its members.

The 12-strong board of trustee directors of USS include employer, employee and independent representatives, acting impartially to protect the rights and interests of members. They are supported by a professional executive and external pension and investment advisers.

Benefits vary depending on factors such as age, but include, subject to USS’s discretion:

1. Retirement pension: A tax-free lump sum and an index-linked pension for the rest of your life.  On your death, during retirement, there would continue to be an index-linked pension for your husband/wife/civil partner/dependent partner. For you spouse/civil partner this would be equivalent to half the value of your standard pension when you retired, plus pension increases applied at date of death. If you are not married, nor part of a civil partnership a pension may be payable to a financial dependant, this is at the discretion of the trustee company.

In addition, under certain circumstances, including if you die within 5 years of retirement, a tax-free lump sum may be payable. Subject to USS approval, financial payments for eligible children are also available if they are up to age 18, or up to age 23 if they in approved full-time education or training. Children who are mentally or physically incapable of supporting themselves may qualify to receive a pension, regardless of their age.

For more information go to questions: How will my USS retirement pension and lump sum be calculated ? What would be my pension as a percentage of my salary ?

2. Illness/injury incapacity cover:  If you cannot continue working because of long-term illness or injury, you may get a pension for life and a tax-free lump sum.  The amounts you would receive depend on whether you have stopped work on the grounds of partial or total incapacity. To qualify for this benefit you must have been a USS member for a minimum of two years in aggregate. Special conditions apply to members if they were known to have a medical condition when they joined USS. 

3. Immediate protection for your family or dependents:  Life cover from day one of your membership. A tax-free lump sum of three times your annual salary if you die in service at any time, plus an index-linked pension for your husband/wife/civil partner/dependent partner. 

For your spouse/civil partner this pension would be equivalent to half the pension you would have received at age 65, based on your potential service to that age but using your pensionable salary calculated up to the date of death. If you are not married, nor part of a civil partnership a pension may be payable to a financial dependant, this is at the discretion of the trustee company.

The lump sum in such cases is not subject to inheritance tax. There would also be support payments for eligible children, normally up to age 18, or up to age 23 in approved full-time education or training and agreed by USS, or physically/mentally incapable of being self supporting.

4. Flexible retirement: You can retire and start receiving your pension before the scheme’s normal retirement age of 65, depending on circumstances.  For more information go to question: What are the benefit arrangements for normal, early and late retirement ?

5. Job Mobility: The USS pension scheme provides for the various employment patterns of people working in the academic world, including career breaks. Moving from one USS member institution to another is particularly straightforward, as is transferring your pension arrangements to many public sector organisations.  For more information go to questions: Is it worth it, if I’m not staying long? Am I locked in if I leave or change my mind? Do I get back what I’ve put in ?

6: Nominating your beneficiaries: It is vital that you nominate your dependants/beneficiaries who you want to receive benefits when you die.  Keep this information up to date by filling in an Expression of Wish form.

Additionally, if you are not married, nor part of a registered civil partnership you may wish to nominate a financial dependant to receive the equivalent of the spouse’s/civil partner’s pension. Please complete a Registration of Potential Dependant form to register a financial dependant.

Moving from one USS member institution to another is particularly straightforward, as is transferring your pension arrangements to many public sector organisations.  If you move to a non-USS employer you can transfer the cash value of your USS benefits straight into another approved pension arrangement e.g. a new employer’s scheme, a personal or stakeholder pension or a buy-out policy.

Alternatively, you can leave everything where it is in USS to increase in value, still gaining from its automatic yearly indexing advantages. You then become a “deferred pensioner” able to draw your money (tax-free lump sum, plus regular pension) at retirement age. For more information go to factsheet eightfor details.

You can usually move your USS pension benefits to an overseas scheme. Transfers from overseas schemes may also be possible. A number of technical formalities and tax issues that will need to be checked are included in our factsheet two.  Please refer to the transfers out section.

If you cannot carry on working because of long-term illness or injury, you get a pension for life and a tax-free lump sum, subject to USS eligibility criteria.  To qualify for this cover, you must have been a USS member for a minimum of two years in aggregate.  Special conditions apply if it was known that you had a medical condition when you joined USS.

If you are off work sick or for other reasons outside your control, your employer will normally continue to pay contributions to USS and your own payments to the scheme will also continue based on you receiving your full salary as usual.  If all you are getting is Statutory Sick Pay, you can choose whether or not to contribute to USS.

Your USS benefits may be subject to a Court order requiring USS to set aside part of your retirement and/or death benefits for your former spouse or civil partner.

Legislation in 2000 introduced a new method of dividing pension rights in divorce or annulment of marriage cases.  This has been extended to cover dissolution and annulment of civil partnerships. The options now are:

Offsetting:  Valuing your pension rights along with other matrimonial assets to enable a financial settlement to be reached.

Earmarking: The Court can order that all or part of your pension and lump sum on retirement and/or all or part of the lump sum arising on your death to be paid to your former spouse or civil partner.

Pension sharing: The Court requires USS to value your pension rights at the time of divorce/annulment/dissolution, and to divide your pension providing you and your spouse or civil partner with a “clean break”

USS reserves the right to recover certain costs from you(and, where permitted, your former spouse or civil partner) that are incurred providing information in connection with an impending divorce/annulment/dissolution or complying with a Court order.

Please see factsheet twenty for more information.

AVCs are Additional Voluntary Contributions. As the name implies they are extra payments that you can make, either regularly or periodically, to boost your retirement pension.  You get tax relief on them at the highest rate of income tax for which you are liable.  You are strongly advised to take appropriate financial advice but note that this cannot be given by USS.  For more information go to the financial advice page.

There are two types: “Added Years AVCs” enable you to buy additional years of service in USS which is a final salary type of arrangement or you can choose a different “Money Purchase” investment plan.

For more AVC information go to: Factsheet one, our Pensions TV section “Increasing your Retirement Benefits” and another USS/Prudential Factsheet entitled “Will your pension be enough?”

Please go to the financial advice page.

All your contributions, including and Additional Voluntary Contributions (AVCs) which you make to boost the value of your pension are currently eligible for tax relief at your highest marginal rate.

However, for members with a total income assessable for tax (from all sources) of more than £130,000 pa there may be restrictions on the amount of tax relief and in addition you may be charged tax on the ‘deemed’ value of any employer contribution.

See this link for more information.

Tax is payable on all pensions in payment, unless your inspector of taxes advises us otherwise

You can plan for early retirement in a tax-efficient way by boosting the value of your pension by making what are known as Additional Voluntary Contributions (AVCs), either regularly or periodically.

As the name implies, these are extra payments which you can make either periodically or regularly.  You get tax relief on them at the highest rate of income tax for which you are liable.

There are two types: “Added Years AVCs” enable you to buy additional years of service in USS which is a final salary type arrangement or you can choose a different “Money Purchase” investment plan. 

You should take appropriate financial advice. For more AVC information go to USS Factsheet One and the financial advice page. Please note that USS is unable to provide financial advice.

AVC payments to either the USS Added Years or the USS Money Purchase AVC facilities are deducted from your gross pay before tax is applied. You therefore receive tax relief at source, in exactly the same way as your normal USS contributions. Currently, you do not have to include details of these AVC payments on your self assessment form if you are required to complete one of these. However, if you make payments yourself to an external policy, for example a Free-Standing AVC or Personal Pension, then you do need to include those contributions on the assessment form. See the HMRC website for further details.

Your pension will be paid for the rest of your life.  If you die and leave a spouse or civil partner their pensions are payable for the rest of their lives. If you are not married, nor part of a civil partnership a pension may be payable to a financial dependant, this is at the discretion of the trustee company.

If there are eligible children any pension paid to them is payable until their 18th birthday or up to age 23 if they remain in full-time education or approved training.

We calculate the money you will get on retirement using two sets of figures - what we call your “pensionable service” and also your “pensionable salary”.

Normally, your pensionable service is simply the number of years and days that you have worked as a USS member with one or more USS employers.

We work out your pensionable salary according to a “best years” earnings formula – smoothing out any adverse ups and downs in your salary over the years.

This is how it works:  we determine your salary for each period of 12 months that you have been a USS member, over a maximum time of 13 years before your retirement, and revalue each salary, except the last 12 months, using the Retail Prices Index measure of inflation.

Your pensionable salary is whatever comes out best -  either the highest revalued annual salary during the last three years or your highest revalued salary averaged across any three consecutive “best years” over the last 13 years.

The actual amount of pension you get is calculated as an eightieth of your pensionable salary multiplied by your years of pensionable service.

You have the freedom to choose not to take some or all of your tax-free lump sum cash and get a higher pension.  Or take more cash and get a lower pension.

The retirement income you get from USS is, of course, in addition to your state pension or any benefits you may also be entitled to from the state social security system. Tax is payable on all pensions, unless your tax inspector tells us otherwise.

The exact amount of your retirement benefits depend on your individual circumstances, your contract of employment and your employer’s policies.

Early retirement: There is flexibility, under certain circumstances, within the USS scheme for you to retire before the scheme’s normal retirement age of 65. But your pension may be lower.  If you contract of employment states that you can retire from age 60 then you will receive your full pension at that time.

If your employer makes you redundant or asks you to retire early then you are also entitled to your full pension. Your employer pays the cost in many cases of this early retirement.

The earliest age you can retire in the UK is age 50 but from April 2010 this will be age 55 unless you are made redundant (as defined in the USS rules) and have been contributing to USS continuously since 5 April 2006, in which case you are still able to receive a full pension from age 50. You can of course receive a pension earlier if you qualify for incapacity retirement benefits.

However, you can set out to plan for early retirement by boosting the value of your pension by making Additional Voluntary Contributions (AVCs), either regularly or periodically.  You can also increase your normal pension income in exchange for deciding to take a lower lump sum on retirement, or none at all, or vice versa, depending on your financial circumstances when you stop work. For more information go to questions: Can I pay more and plan for an earlier retirement and get a bigger pension? What are AVCs?Late retirement: If you want, you can continue paying into USS beyond age 65 and build up a bigger pension. It is however option for your employer to pay contributions past age 65. If they choose not to then you can still pay in but you will only be credited with 25% of future service to count towards your pension. There is no upper limit on the years of service you can achieve.

Additionally, after you have reached 40 years service your employer may not continue contributing towards your pension. If this is the case your own continuing payments to USS will only add 25% to your future service. 

Working after retirement: If you have retired (having ceased eligible employment) from USS, and are receiving your pension, you can still get another job, but remember that your total income, including your pension, will be assessed for income tax.

You could even work for another higher education employer, but unfortunately, once you are in receipt of a USS pension you cannot rejoin the scheme.

Please note that there are additional conditions attached if you retired from USS on the grounds of incapacity.

USS pensions are reviewed every year using the Retail Prices Index measure of inflation. Public sector pension schemes (NHS, civil service, local councils etc.) follow the same practice. This also applies to pensions for wives/husbands/civil partners/dependents, payments for eligible children, and deferred pensions. 

The annual increases, usually paid every April, reflect the changes in the index over the 12 months up to the previous September.

Deferred pensions, which are those left behind in USS after leaving membership, are increased just the same throughout the period of deferment to ensure that people who take this option get the full benefit of indexing when they eventually take their USS retirement pension and tax-free lump sum.

The USS benefits for long-term illness/incapacity retirement or death in service are, in part, funded differently.  In some case elements of them are not guaranteed to be increased fully in line with inflation, but to date (since 1975) the board of USS trustee directors have always decided to do so every year.

Please note: During any periods of deflation, or negative retail price inflation, we will not reduce the value of your pension, but your pension may not increase.