Presentation on theme: "1 your pension benefits UODSS & The University of Dundee Superannuation & Life Assurance Scheme."— Presentation transcript:
1 your pension benefits UODSS & The University of Dundee Superannuation & Life Assurance Scheme (UODSS) Presentation to members 11 June 2014
2 your pension benefits UODSS & ■ Today’s agenda □ Introduction □ UODSS - Membership and benefit outgo - How your benefits are calculated - How your pension will increase - Recent changes - partial transfers - Recent changes - impact of the March 2014 Budget □ What’s on the horizon □ Update on Scheme Funding □ Long term strategy
3 your pension benefits UODSS & ■ Introduction □ Welcome to the 2014 Member Presentation □ We have listened to feedback from the 2012 Presentation and incorporated some of the suggestions in this session □ Copies of the slides will be made available on the pensions web page □ We will contact you after the presentation to get your feedback to ensure we continue to cover the issues you want to hear about
4 your pension benefits UODSS & ■ Change in UODSS membership Due to Automatic Enrolment
5 your pension benefits UODSS & ■ UODSS – future benefit outgo The last payments to existing UODSS members are expected to be made around 75 years from now, but this depends on how long members live for. Since UODSS is open to new members, payments will stretch out even further into the future...
6 your pension benefits UODSS &
7 your pension benefits UODSS & ■ How will my pension increase once in payment? Pension built up between April ‘97 and July ‘09 RPI min 3% max 5% p.a. Pension built up between July ‘09 and July ‘11 RPI max 5% p.a. Pension built up after July ‘11CPI max 5% p.a. Pension built up before April ’97*3% p.a. *on pension in excess of Guaranteed Minimum Pension (GMP) Final Salary CARE
8 your pension benefits UODSS & ■ Benefit calculation timeline ■ Current UODSS benefits Increases in payment 3% p.a. Guaranteed Minimum Pension is subject to statutory minimum increases RPI min 3% max 5% p.a. RPI max 5% p.a. CPI max 5% p.a. Increases before retirement Active: In line with Pensionable Salary Deferred: CPI max 5% p.a. Active - CPI max 5% p.a. Deferred CPI max 2.5% p.a. Normal retirement age Males – 65 Females - 60 Males & Females - 60 Males and females - 65 Benefit calculations Final SalaryCARE
9 your pension benefits UODSS & ■ Recent changes - partial transfers □ The Trustees and University recently agreed to amend the Rules of the Scheme to allow partial transfers introducing extra flexibility for members □ How do partial transfers work? Before transferAfter transfer
10 your pension benefits UODSS & ■ Recent changes - March 2014 Budget announcements □ How do the announcements affect me? - More flexibility to exchange small pensions for a one-off lump sum - Increase in Minimum Pension Age from 55 to 57 – from April State Second Pension (S2P) – ability to top up S2P before ‘Single Tier’ State Pension applies - Possibility that restrictions will apply to transfers from Defined Benefit (such as UODSS) to Defined Contribution schemes - For more information, please refer to the Trustees’ ‘Response to the Budget Announcements’ Factsheet available from the Pensions Area of the University website
11 your pension benefits UODSS & ■ Possible changes in the future □ From April 2016, the Single Tier State Pension will combine the Basic State Pension (BSP) with the State Second Pension (S2P) □ At present... - UODSS members (like members of most Defined Benefit schemes) are currently guaranteed a level of benefits well above the S2P pension and do not earn an S2P benefit while contributing to the Scheme. - In return members (and the University) pay lower NI contributions to the Government □ From April Everyone will start to build up the new ‘Single State Pension’ in addition to any other pension benefits they earn - UODSS members (and the University) will have to pay higher NI contributions - It is likely that Defined Benefit schemes (such as UODSS) will be able to amend their rules to allow for the change □ It is likely that the University will consider this issue carefully and members will be informed if any changes to the Rules are planned
12 your pension benefits UODSS & ■ Scheme Funding □ What has happened since the last valuation? □ How does this compare with other schemes?
13 your pension benefits UODSS & ■ Views on Scheme Funding □ The period since the previous valuation was very challenging due to the recession and Eurozone crisis and the impact on liability values □ The issues faced by UODSS are the same as those faced by a large number of schemes across the UK □ The vast majority of other defined benefit schemes are in a similar position □ The Trustees will continue to take a long term view on investment and funding □ They will also continue to gain reassurances from the University for its ongoing support for UODSS
14 your pension benefits UODSS & ■ Long term strategy □ The University has re-affirmed its commitment to the Scheme □ UODSS is a very long term savings vehicle and the Trustees take a long term view when setting the funding and investment strategy □ Short term fluctuations in the funding position are expected. The Trustees monitor the funding position closely to avoid any surprises and take action if required ■ Detailed health-check □ A full valuation of UODSS will be carried out at 31 July 2014 □ The Trustees will also review the Scheme’s investments □ The Trustees will update members on the outcome of the 2014 valuation after completion – expected by Q2 2015
15 your pension benefits UODSS & ■ Any questions?