My annual member statement: what do I need to know?

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It’s not uncommon to feel detached from your pension savings. In fact, according to research conducted by Which?, nearly half of those over 50 who were surveyed aren’t confident they know the value of their pension, and 21% revealed that they have never checked how much pension savings they have.

The earlier you start getting to grips with your pension, the better your chances of planning the retirement you want. Many USS members seem to have taken the first step, with 4 in 5 either having a very good or reasonable idea of how much money they will need in retirement.

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With a pension savings target in mind, it’s important to regularly check in on your pension savings to make sure you’re on track for the retirement you have in mind. The arrival of your annual member statement from USS is the perfect opportunity for you to review your pension savings, and make any necessary adjustments to help you reach your retirement goals.

Use the USS benefit illustrator to get an estimate of your USS retirement benefits.

Introducing your annual member statement

Early in 2018, approximately 190,000 USS members will receive their annual member statement. This will tell you how much you’re currently expected to receive as a retirement income based on what you have built up with USS to 31 March 2017, and the expected value of your tax-free cash lump sum. If you’ve been making pension contributions to the USS Investment Builder, the value of these savings to 31 March 2017 and a projected value will be included. Don’t forget your most up-to-date USS Investment Builder value can be viewed in My USS.

Find out more about the USS Investment Builder by watching our animated guide.

To help you digest all the information in your statement, we’ve picked out seven key parts.

1. Your pension age.

The normal pension age (NPA) for most USS members is currently 65. However, you may be able to retire before or after your NPA. Take a look at our retirement factsheet for more information.

If you’re making additional pension contributions into the USS Investment Builder, your Target Retirement Age (TRA) will also be included. This is the age at which you’d like to start accessing your USS Investment Builder savings, and if you have not yet set your TRA this will be defaulted to your NPA, more information about your TRA is available in the guide to investing in the USS Investment Builder.

You have a number of options when it comes to accessing these savings, so it’s important you know your choices and set your TRA accordingly.

2. Your total retirement income benefits built up to 31 March 2017.

This is the income you’ve built up for your retirement whilst you have been a member of USS.

3. The value of your contributions (if any) in the USS Investment Builder.

If you earn over the salary threshold (£55,550 for 2017/18), have recently transferred into USS from another scheme or have been making additional pension contributions into the USS Investment Builder (including the match), your statement will also show how much you’ve saved in this section of the scheme to 31 March 2017 along with a projected value. Don’t forget your most up-to-date USS Investment Builder value can be viewed in My USS.

4. Details of where your USS Investment Builder contributions are invested.

The contributions you and your employer make (if any) to the USS Investment Builder are invested, you have a choice how these are invested. Find out more about your investment choices in the USS Investment Builder by reading our blog, Why investment performance matters, or watch our investment choices animated guide.

5. Your bereavement benefits for your nominated beneficiaries.

For peace of mind, it’s good to know that your nominated beneficiaries could receive benefits should you die whilst still contributing to USS. This section outlines these benefits.

6. The value of your tax-free lump sum for when you retire.

Upon retirement, you’re entitled to a tax-free cash lump sum, as well as your retirement income. The standard package of benefits in the USS Retirement Income Builder is an annual pension, plus three times that pension as a one-off tax-free lump sum.

7. The value of the benefits you have earned in the 2016/17 tax year and the annual allowance (AA) for your last four tax years.

The contributions you make to approved pension schemes receive tax relief, and your benefits are built up free of tax, subject to limits set by HMRC.

Your USS contributions receive tax relief but you may have to pay a tax charge if you exceed AA limits set by HMRC – your statement shows the AA value of the benefits you have earned for the tax year ended 5 April 2017 and the previous three input periods.

Am I on track?

When you’ve had the time to digest the information in your annual member statement, you may want to think about the options available to you at retirement. Take a look at our retirement decision tree to get a better idea of what you’re likely to get at retirement and what choices you might want to make before you retire.

The benefits you’ve already built up in your USS Retirement Income Builder are secure and protected by law. Your USS Investment Builder funds are also protected but their value changes over time depending on investment returns (the value can go up or down). If you're not sure you're on track to reach your retirement goals, take a look at our blog, What decisions do I need to make about my pension, and when?. This will highlight the next steps you can take after receiving your annual member statement.

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Want to check in with your USS Investment Builder savings more regularly? Register for My USS

Next steps

When you receive your annual member statement, it’s important to take the time to understand it and decide whether you’re on track for the retirement you want. Use the retirement decision tree to get to know all the options available to you as a USS member and help you make decisions about your retirement.

If you’d like to find out more about your options at retirement and how you can boost your retirement income, take a look at our further reading options below.

Important note: This publication is for general guidance only. It is not a legal document and does not explain all situations or eventualities. USS is governed by a trust deed and rules and if there is any difference between this publication and the trust deed and rules the latter shall prevail. Members are advised to check with their employer contact for the latest information regarding the scheme, and any changes that may have occurred to its rules and benefits. Any references to the trustee or USSL in this document means Universities Superannuation Scheme Limited, the trustee company of Universities Superannuation Scheme and any references to the scheme or USS means Universities Superannuation Scheme. As you review this information, please keep in mind that past performance is not necessarily a guide to future performance. The value of investments may go down as well as up and the return on your investments is not guaranteed.

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