Did you know at USS you get life cover as part of your pension?
This means that typically on a salary of £55,000, your loved ones could get a lump sum payment of £165,000. On top of that, your dependants could receive a pension too.
You may also qualify for ill health cover if you become too ill to work.
So, what happens if you die whilst paying in to USS?
If you have a spouse or civil partner, they could receive an income for life worth around half the pension you would have got at your Normal Pension Age. They could also get a lump sum of three times your salary.
If you do not have a spouse or civil partner but have someone who is dependant upon you financially or because of a physical or mental disability, they may also qualify for a dependants’ pension.
And if you have children under 18 years old - or up to age 23 if they’re in full time education - or who are unable to support themselves because of a physical or mental disability, they could be eligible for a pension too.
What about your Investment Builder savings?
If you pass away with savings in the Investment Builder, what happens to these depends upon how you’ve built them up:
- Any contributions from you and your employer based upon earnings above the salary threshold will be credited back to USS because your life cover from the Retirement Income Builder is based upon your full salary, and not your salary up to the salary threshold.
- If any part of your Investment Builder pot is made up of contributions from you or your employer which are based upon earnings below the salary threshold, are additional contributions, or are benefits you’ve transferred in to USS from another pension arrangement, these benefits will be paid as a lump sum.
Good to know
Payment of the lump sum is made at the discretion of the trustee, but your wishes are taken into consideration. This allows the trustee to ensure your money goes to the right people and means it’s not subject to Inheritance Tax.
Ill health cover
If you’ve been paying in to USS for at least two years and you have an illness or condition that stops you from working or reduces your capacity to work, you may be eligible to retire early and be paid your USS benefits.
What's next?
Thinking about life and ill health is a big deal - but it’s important. Find out more about how your USS membership could help you to look after your loved ones and support you through ill health on the life events page.
Make sure you keep us up to date on your beneficiaries and dependants by completing an Expression of Wish and Registration of potential dependants in My USS.