1. Your USS Journey Every effort has been made to present accurate information. Members are advised to check with their employer and/or the USS guides to confirm their understanding before acting on any information given. This presentation may be recorded for training and audit purposes. Presentation for USS members Colin Busby and Eifion Morris APMI

2. The journey Travel safety Starting out and benefits Connections Upgrade Unscheduled events Reaching your destination Future plans Your questions

4. Is it safe to travel?

5. What about USS? Extreme volatility of financial markets has an effect on USS investments Long-term investor Positive cash flow Strong employer covenant Last man standing Pension Protection Fund

6. In the future Joint Review Group formed by employers and UCU “To determine what changes should be made to ensure USS remains an attractive and affordable defined benefit pension scheme”

7. Joint Review Group Agreed principles (risks) in October 2009 –Longevity –Salary increase risk –Investment flexibility

8. Joint Review Group Possible ways to address risks –Later retirement age and/or higher member contributions –Calculate benefits on ‘career average’ basis –De-risk investments –Introduce flexible retirement Career average outcome not inevitable Accrued benefits protected

10. The basics

11. The calculation

13. Part-time calculation 100%30%50%100% Years 10 20 30 40 10 20 30 40 Salary £000s 10 years 3 years 10 years 5 years

14. Part-time calculation

17. Transfers in to USS Transfer previous benefits to USS Beneficial Club transfers –Two year time limit on transfers from the Public Sector Transfer request form See factsheet 2

19. Increasing your benefits Pension not enough? –Break in service, like maternity –Thinking of retiring early? Save more

20. Options in USS Two USS options for increasing your pension and/or tax-free cash 1.Added years AVC and/or 2.Money Purchase AVC (Prudential) Other savings/investments available

21. Comparison Added years Money purchase Up to 100% £Tax reliefFlexibilityTax-free cash15% maximum £Tax reliefCertaintyTax-free cash

22. Example – before added years

23. Example – with 5 added years

24. Added years modeller

25. Prudential AVC calculator Website www.pru.co.uk/usswww.pru.co.uk/uss

26. How to pay AVCs – Added Years Added Years Use modeller on www.uss.co.uk Contact Pensions Office Money Purchase Contact Prudential directly Face-2-face0800 515914

27. Remember… AVCs are not the only way to save for retirement AVC funds cannot be accessed before retirement USS cannot advise you which option to choose More information in factsheet 1 High earners – Budget note 2009

29. Benefits for your dependants Life assurance of 3 x salary Income protection –Spouse/dependant/civil partner –Children Update your beneficiary details –Death benefit nomination form (3 x salary) –Registration of financial dependant form (dependant’s pension)

31. Retirement options Pension & cash options Incapacity retirement Early retirement Normal retirement

32. In accordance with the contractual retirement age stipulated in your contract of employment

33. Early retirement Between 50 & 60 due to redundancy or at request of employer –Pension not reduced for longer payment –Based on service at that date unless compensation available Employer pays ‘funding charge’ From age 60 with employer consent Minimum retirement age 55 from 6 April 2010

34. Incapacity retirement Total incapacity or partial incapacity benefits Factsheet 10

35. Varying pension and cash Vary the cash –No cash and higher pension –Higher cash and lower pension Maximum 25% of capital value –Multiply your pension by 20 –Add on tax-free cash –Add on any Prudential AVCs

37. Conversion example Capital value= £460,000 (20 times AP+TFC) Maximum TFC= £115,000 (25% of pension pot) Less standard cash= £ 60,000 Potential extra cash= £ 55,000 Annual Pension (AP) = £20,000 pa Standard tax-free cash (TFC) = £60,000 Annual Pension (AP) = £20,000 pa Standard tax-free cash (TFC) = £60,000 Your choices -Exchange pension for extra cash Your choices -Exchange pension for extra cash Pension= £ 16,391 pa Tax-free cash= £115,000

38. Conversion example Capital value= £515,000 (20 times AP+TFC+PRU) Maximum cash= £128,750 (25% of pension pot) Less standard cash= £ 60,000 Potential extra cash= £ 68,750 Annual Pension (AP) = £20,000 Standard tax-free cash (TFC)= £60,000 Pru AVC fund (PRU)= £55,000 Annual Pension (AP) = £20,000 Standard tax-free cash (TFC)= £60,000 Pru AVC fund (PRU)= £55,000 Your choices Use Prudential AVC as extra tax-free cash and receive full pension Your choices Use Prudential AVC as extra tax-free cash and receive full pension Pension= £ 20,000 pa Tax-free cash= £ 115,000

40. Where next? Keep your ticket Pensions office contacts Prudential – www.pru.co.uk/usswww.pru.co.uk/uss USS website – www.uss.co.ukwww.uss.co.uk –Slides available here –Pensions TV