Leaving the scheme

If you leave the scheme, either by ending employment or withdrawing from the scheme, there are various options available to you depending on the amount of service you have upon leaving. For more information please refer to the USS guide to leaving and the Options on leaving factsheet.

Membership is voluntary, however, government legislation means most members will automatically join the scheme unless you actively opt out once you have joined. In specific circumstances, for example if you are on a variable time contract, you may not join automatically. If you are unsure please speak to the USS pensions contact at your employer.

Once you leave USS your employer will let us know. We will then write to you to confirm the benefits you are entitled to and where to find out more.

Less than two years’ qualifying service

You may choose any one of the following:

  • a refund of your own contributions, less statutory deductions of tax (and a premium to re-instate you in part of the State Pension system for any membership up to 5 April 2016); or
  • a deferred pension and lump sum in USS based on the value of your contributions to the scheme; or
  • a transfer of the value of your full benefits to another approved pension arrangement. You also have the facility to transfer your money purchase AVC fund and/or any USS Investment Builder funds independently of your USS Retirement Income Builder benefits.

For the the USS Investment Builder, if you have less than three months’ contributions, your refund will be based on the amount you have paid in. If you have paid more than three months’ contributions you will receive the fund value (i.e. including any investment returns earned on those contributions).

Please also be aware that if you have contributed to USS through salary sacrifice , you will not be entitled to a refund of contributions for the period of any sacrifice as these will have been paid for you by your employer as part of the arrangement. Please note that if you transferred benefits from a personal pension into USS, you will not be able to receive a refund even if your service, including the transfer, is less than two years.

For more information please refer to the USS guide to leaving the scheme.

More than two years’ qualifying service

If you have over two years' service, a refund is not available to you and your pension and lump sum benefits will be calculated and confirmed to you in writing.

If you leave your benefits in the USS Retirement Income Builder this is what we call a deferred pension. Any pension (and cash) benefits you have built up at that point will be increased in line with USS’s standard pension increases.

Any USS Investment Builder funds (and any money purchase AVC funds) you have built up will continue to be invested for you and you will still be able to manage these investments as usual, but you will not be able to contribute further.

As an alternative to deferred benefits you can transfer your benefits to another pension arrangement (provided the receiving scheme is approved by acceptable to HM Revenue & Customs). This includes most UK pension schemes and some overseas arrangements. You also have the facility to transfer your money purchase AVC fund and/or any USS Investment Builder funds independently of your USS Retirement Income Builder benefits.

Can I continue to pay in to USS if I leave my job?

No. Once an employment that entitles you to USS membership ends you can no longer pay in to the scheme. If you have withdrawn from the scheme but continue in an employment which entitles you to USS membership you can re-join the scheme at any time.

For more information please refer to the USS guide to leaving the scheme.

Moving employment between USS employers

If you transfer to another employer who participates in USS and there is less than one calendar month between posts you can remain in USS without a break in your membership.

If there is more than one calendar month between posts you will be classed as having left the scheme and your options will be the same as for any other leaver.

Remember, if your personal circumstances have changed, make sure your expression of wish form is up to date.

Financial advice

You are encouraged to take financial advice before moving your retirement savings. It is now a legal requirement to take financial advice when transferring defined benefit rights from a scheme like USS to a defined contribution scheme when the defined benefit transfer is £30,000 or more.

Pension Wise - if you need some impartial guidance about the options you have with the USS Investment Builder you could contact Pension Wise. Pension Wise is a free and impartial government service set up to give you guidance on your options under defined contribution schemes, like the USS Investment Builder.

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