This is because of changes to the way you build up benefits in the Retirement Income Builder and savings in the Investment Builder from 1 April following a decision by the JNC, in response to the 2020 valuation of the scheme.1
From 1 April 2022 the accrual rate changed from 1/75 to 1/85 and the salary threshold reduced from £59,883.65 to £40,000.
The accrual rate is the rate that benefits build up in the Retirement Income Builder. It’s equivalent to a portion of your salary up to the salary threshold: The salary threshold is the limit at which you’ll automatically start paying into the Investment Builder. The benefits you build in the Retirement Income Builder are based on your salary up to the salary threshold. Since 1 April 2022, you’ve built up a Retirement Income Builder pension worth 1/85 of your salary and a separate lump sum of 3/85 of your salary up to the salary threshold. Prior to 1 April 2022, you built up a pension at a higher rate of 1/75 of your salary and a separate lump sum of 3/75 of your salary up to the salary threshold.
This means that, since 1 April, you’ve built less Retirement Income Builder benefits than in previous years. They’ll still be increased in line with USS’s standard increases both before and after you retire, and you’ll still have all of the same options at retirement, including your tax-free lump sum (up to certain limits). Any benefits you’ve already built up before 1 April 2022 will not be affected by these changes.
From 25 September to 24 November, employers are consulting with affected employees and their representatives on the JNC’s proposals in response to the 2023 valuation. One of those proposals is to return the accrual rate to 1/75 of your salary up to the salary threshold for pension built up and 3/75 for the lump sum from 1 April 2024. You can respond to the consultation on the consultation website or through your employer or employer representative. All responses received during the consultation period will be considered before any final decision is made and implemented.