I’m thinking about retiring soon

What does the COVID-19 pandemic mean to my pension?

The most important points are:

  • Contributions will continue to be processed for all members paying into the Scheme
  • Pensions will continue to be paid throughout this period
  • Benefits built up in the Retirement Income Builder are protected by law and by the strength of the employers of the higher education sector in the UK
  • We’re actively monitoring the performance of our investments
  • We’re fully operational and are prioritising key activity

Your contributions and Retirement Income Builder benefits are not expected to be impacted by COVID-19. If you have Investment Builder savings, you may see some fluctuations in your investment performance due to stock market volatility, but we are monitoring this.

Please see 'Will my investments in the Investment Builder be impacted as a result of COVID-19?' FAQ for more information.

I have received a retirement quote in the last few weeks – what should I do?

You can usually change your mind about the retirement options you’ve chosen, as long as you give us enough notice. Find out more.

If USS has to close due to COVID-19, will this impact my pension?

We have technology in place for our teams to deal with business-critical processes, so even if we have to close the office, we have processes in place to ensure we can both:

  • Process the pension contributions we receive from employers on behalf of all members paying into the scheme
  • Pay pension payments to members

In line with government advice and because the wellbeing of our employees is a priority for us, wherever possible, our employees have been working from home from Tuesday 17 March 2020.

We have also introduced staggered work schedules, social distancing and additional safety and cleaning steps to protect those employees that do need to work from office locations.

Will COVID-19 affect my Retirement Income Builder pension?

The stock market fluctuations have impacted the funding level of the scheme, but this does not affect our ability to pay the pensions promised to members.

Will my investments in the Investment Builder be impacted as a result of COVID-19?

The stock market has been disrupted as a result of investors trying to price the potential impact of COVID-19 on the global economy. You will have seen an immediate impact on unit prices used to value your funds. We continue to monitor the funds.

We offer a range of funds in the Investment Builder, with the USS Lifestyle Options providing a lower risk profile as you approach your Target Retirement Age and therefore being less subject to market volatility. You can find fund information and further information on the Investment Builder, including how to view or change your Target Retirement Age on My USS.

If you are close to your Target Retirement Age, and your savings are invested in one of the Investment Builder Lifestyle Options, they will have been switched to more cautious funds to help protect them from the volatility of market fluctuations. The switching into more cautious funds does not remove the impact of market fluctuations, but it does help to reduce impact of any extreme market movements.

If you are about to retire and wish to take your Investment Builder funds as part of your retirement benefits, disinvestment of the funds will be fulfilled by our staff (working remotely if required). We have arrangements in place to ensure that contributions to the Investment Builder will continue to be invested with the same frequency as now.

If you want to consider seeking financial advice to see what’s best for you, you can use the Money Advice Service’s adviser directory to find a financial adviser (you may be charged a fee for any advice you receive).

Can I change my Investment Builder investment strategy?

You can make changes to your Investment Builder funds at any time in My USS. If you’re not sure about what’s best for you, we recommend that you speak to a financial adviser before making any decisions.

Information about our funds can be found in the Guide to investing in the Investment Builder.

Can I still transfer benefits from another pension into USS?

We are currently operating some services at a reduced level due to COVID-19. This allows us to prioritise key activities during this period. As such, we will not be processing any transfers in until further notice. If you request a transfer, we will log your request and contact you when we are ready to process it. We will continue to review this service.

What’s happening with transferring out?

For now, arrangements for transferring out of USS are unchanged. If you are considering transferring out your USS benefits to another arrangement, please visit the Pensions Advisory Service for free and impartial guidance.

I’m planning to work in the NHS/increase my clinical role during the emergency period. What will
that mean for my USS pension?

This depends on your contractual and work situation:

  • If you have a substantive contract with your USS employer and an honorary contract with an NHS trust, and you increase your hours under the latter, the position depends how you are remunerated for that work. For example, if you continue to be paid in full by your USS employer, there’d be no change for you – you’d continue to build USS benefits based on that pay. However, you need to speak to your employer to determine the exact situation for you.
  • If you are re-registered on the emergency COVID-19 Temporary Register to support the NHS, you may cease working for your USS employer entirely, take voluntary unpaid absence or be seconded from your USS employer.
  • If you cease working for your USS employer (your employment contract terminates and you work directly for the NHS), you will become a deferred member of USS, and will be entitled to the appropriate leaver benefits.
  • If you take voluntary absence or secondment, so there’s a firm intention to return to USS employment in the future, you can agree with your USS employer that your USS contributions will continue. In this instance, there’s no change to your USS membership of entitlements.

However, if you and your employer don’t agree that contributions continue, you’ll stop building up USS benefits until you return to your USS Employment. However, in this instance, we will continue to give you the same life and ill-health cover that you get as a USS member. This position will be kept under review.

If you don’t re-join USS after you’ve finished working for the NHS, you’ll be treated as having left the scheme at the date that contributions ceased.

I’m going to take Emergency Volunteering Leave. How will that affect my USS pension?

Once you’ve agreed it with your employer, we’ll treat you in the same way we would if you were still in work, so your contributions will continue to be paid, pension and lump sum benefits will continue to build up, and life and ill-health cover will continue:

  • Contributions from your employer will continue, and will be based on your normal pay prior to absence.
  • Your contributions will be based on your actual pay during the Emergency Volunteering Leave period (which may be £0).
  • Benefits and life and ill-health cover will be based on your normal pay prior to Emergency Volunteering Leave.

What will happen to my USS pension, if I’m furloughed?

At the moment, there’s no legislation in place in respect of the Coronavirus Job Retention Scheme, so our current position is only based on the current guidance available.

If you’re placed on furlough, you continue to be contractually employed by your USS employer throughout the furlough period. As such, the pension contributions you and your employer pay should continue at the normal USS contribution rates, but based on your actual pay during the furlough period.

The pension and lump sum benefits that you build up will continue, as will life and ill-health cover, with each also being based on your actual pay during the furlough period.

I’m working to support a critical service; will I still get life and ill-health cover?

Generally, the answer to this is yes, as long as you:

  • are working under an honorary NHS contract but continue to hold, and be paid through, a substantive USS employer contract;
  • have taken voluntary absence from your USS role in order to support the NHS, but you intend to return to your USS role afterwards; or
  • have taken Emergency Volunteering Leave.

If you’re not sure whether any of the above apply to you, speak to the USS pensions contact at your workplace.

I want to suspend my USS membership, during this period – can I?

This depends on the circumstances of your employment. We have a factsheet that covers absence in the resources area.

This only covers situations where you’re absent from work, and not continuing in work and seeking to voluntarily stop paying USS contributions.

If you are continuing in work (including where you’ve been furloughed) and you want to stop paying contributions, you can opt out of USS. However, if you do this, you’ll stop building up benefits and lose your life and ill-health cover.

If you subsequently re-join the scheme (or are re-enrolled under auto-enrolment), the benefits from the new period of service would simply be added to those from the previous period, provided they had not been transferred out of USS.

Alternatively, you can stop building up pension benefits but pay contributions to continue life and ill-health cover through the Enhanced Opt Out option, but this has a number of restrictions. See the factsheet in the resources area for more information.

What can USS do for my loved ones?

USS provides valuable benefits to your family or other dependants, if you die whilst paying into the scheme. We could also provide benefits, if you have to stop working because of ill health or incapacity.

While you’re paying into USS, you get life cover of three times your salary as a lump sum payment and you tell us who you’d like to receive it. All you have to do is complete an Expression of Wish form to nominate who should receive the money if you die whilst paying into the scheme.

The money is also paid tax free, as it doesn’t form part of your estate for inheritance tax purposes. So those you nominate, your beneficiaries, won’t have any unexpected tax charges.

As well as a lump sum payment there’s more that could be paid to your dependents should you die – a pension will also be payable to your spouse or civil partner for life as well as an income for any eligible children too. If you want to register a dependant, simply complete and return the Registration of Potential Dependant form.

After you’ve retired, you’re no longer eligible for life cover, but your loved ones could still receive a pension from USS.

You should review your Expression of Wish and Registration of Potential Dependent forms at least every three years, to make sure they’re up to date.

You can find out more about life cover and incapacity retirement in the factsheets in the resources section of the website, where you’ll also find the forms. At the moment, due to social distancing advice, you don’t need someone to witness your signature on your forms, but we may contact you in the future to arrange for this.

Given the uncertainty around COVID-19, these answers are subject to change and may be updated as appropriate when more information becomes available. Information provided in this content is correct to the best of our knowledge at the time of publishing. This publication is for general guidance only. It is not a legal document and does not explain all situations or eventualities and should not be relied upon by you. It is not intended to be and should not be construed as advice.

Published 29/04/2020