Get to know more about our Enhanced Opt Out option
What is Enhanced Opt Out?
With Enhanced Opt Out (EOO), you stop building up retirement benefits, but keep your life and ill health cover. This could be useful if for example you're close to or over the Lifetime Allowance (LTA). Take a look at what happens when you die and ill health retirement for more information.
If you choose Enhanced Opt Out, you’ll pay 2.5% (rather than 9.6%) of your salary.
Things to keep in mind
There are a few things you should consider before you choose EOO:
You must keep it for least a year
You can only choose it once – if you cancel, we can never reinstate it
You won’t be able to take flexible retirement
You may still lose any LTA protection you have if you retire because of ill health
You won't receive any further late retirement increases if you retire after the Normal Pension Age (NPA).
You should also bear in mind that ill health cover only provides extra benefits if you retire before age 65 (or once you've earned 40 years' pensionable service). If you've chosen EOO, you'll still get life cover up to when you die, but you won't get any extra ill health cover benefits.
Is EOO right for you?
If you want to seek guidance or take financial advice on the options available to you, visit the guidance and financial advice page. You’ll find a range of resources to support your planning and you can also find information on how to access an independent financial adviser.
EOO must start on the first of the month, but you’ll need to give us at least 28 days’ notice.
Got a question?
Yes, but only after EOO has been in place for at least 12 months. Before you do this, consider whether building other benefits again will lead to any tax implications. Once you’ve cancelled EOO, we can’t reinstate it.
The contribution rate for EOO is 2.5%.
You can only do this if you’re retiring from the role in which you get your USS benefits.
EOO won’t affect your application for Individual protection 2016.
For Fixed Protection 2016, you would have to have stopped building your pension by 5 April 2016. So if you didn’t have EOO on 1 April 2016, it’s now too late to apply for Fixed Protection 2016.
If you have Fixed Protection 2016 but you carried on building benefits, it’s your responsibility to inform HMRC that you no longer have the Fixed Protection.
You can keep any late retirement increases that have been applied up to the date your EOO starts. However, from when it starts up to retirement, no further late retirement increases will be added.
As long as your employer consents, you can opt for flexible retirement before using EOO. However, once you’ve said you want EOO, you won’t be able to take future flexible retirement.
Your benefits will be calculated based on what you’d built up before your EOO started.
In the case of retirement before the Normal Pension Age (NPA), any reductions which apply to your pension will be the same as if you hadn’t used EOO – and you’d carried on building your pension with us.
Yes. But you’ll need to make sure your contributions don’t breach the conditions of any Lifetime Allowance protection you may have in place.