Pension ABC

A. Starting or changing my job

A1. When am I insured with the workplace pension scheme provided by the Universities Superannuation Scheme (USS)?

USS is the occupational pension scheme for employees in an academic or academic-related role. When working in the UK for an employer who is a member of USS you automatically enter the USS pension scheme. Many USS affiliated employers are UK universities or other such higher education institutes. However, not all UK universities and higher education institutes are affiliated to USS and other types of employers are also members of USS. See which universities and higher education institutes participate in the USS pension scheme:<

Please note: If you are on a variable time contract you might not be insured with the USS pension scheme automatically. Meaning, you haven`t got fixed working hours making your employment and earnings unpredictable. Please ask your employer if you will be joining the USS scheme or not.

A2. What kind of pension schemes does USS offer?

For many years USS had a Final Salary system from which guaranteed benefits resulted under certain requirements. These benefits were based on the employee’s last salary.

There have been two major revisions in the USS pension scheme in order to replace the so-called Final Salary Section (FS).

In 2011, USS introduced the so-called Career Revalued Benefits (CRB) for all new members who joined after 30 September 2011, and for some members who re-joined the scheme when certain conditions were met.

The second revision comprised the following: As of 1 April 2016 benefits provided and contributions payable have changed. The new scheme is called “Revised Career Revalued Benefits” scheme. The Revised Career Revalued Benefits scheme has two sections, the Retirement Income Builder and the Investment Builder.

The Retirement Income Builder is the pension scheme you join automatically when becoming a member of USS. This is a defined benefit (DB) scheme, meaning the retirement benefits you will get later on base on the time period you have been a member of the scheme and the salary used as a calculation basis for your contributions. Every year you build up a pension of 1/75 of your insured salary.

Under this section you receive an annual pension and a lump-sum when you reach retirement age (see Question C4). Until 30 September 2016 the Retirement Income Builder was irrespective of income. As of 1 October 2016, the income threshold was set at £55,000 and will increase every year.

Salaries above the threshold of £55,000 are pensionable to the so-called Investment Builder section.

How much pension you will get from the Investment Builder corresponds to:

  1. How many contributions have been paid in by you and your employer during your membership
  2. How those contributions are invested and
  3. How those investments have performed. Concerning the investment strategy, it is possible to choose among a range of options. You can also choose a “Do it for me” - approach. More detailed information here:

These two sections are completely separate from each other.

Please note: It is also possible to decide to increase your later pension by joining the Investment Builder section when earning below the threshold, see Question A11. This will be in the form of additional voluntary pension savings.

All benefits you earned up to that date are protected, see A3.

A3. I have been insured with USS before 1 April 2016. What about my accrued rights?

The pension entitlements accrued until 1 April 2016 under the Final Salary (FS) Section have been calculated using your pensionable salary and your pensionable service (insurance times) at the closing date on 31 March 2016.

As of 1 April 2016 you will be accruing pension entitlements under the Revised Career Revalued Benefits (CRB) scheme until you retire, as explained in question A2. However, when retiring you will receive two kinds of benefits: the pension benefits built up under the new scheme from  1 April 2016 onwards, and as  an addition those pension benefits which were accrued under the Final Salary System (FS) until 31 March 2016 as a service credit.

The service credit will be calculated on the “smoothing out - formula“. This method calculates your total benefits up to 31 March 2016 - based on your total membership and your pensionable salary (it can be the highest revalued annual salary during the last three years or the highest revalued salary averaged across any three consecutive years during the last 13 years – your so-called “best years”). This pensionable salary will be added to your pensionable salary accrued under the new scheme until you retire.
More detailed information:

Note: You will receive a statement confirming the value of your accrued pension benefits from the Final Salary Section (FS) before the end of 2016. Members of the Career Revalued Benefits (CRB) section will find information on benefits earned up to and including 31 March 2016, as well as those benefits earned from 1 April 2016, in the Retirement Income Builder. The provided information statement will also include information on the Investment Builder in case you are a member of that scheme too.

More detailed information here:

A4. Can I opt-out of the USS scheme?

Membership is not compulsory, but in order to opt-out you must state this in writing before starting your job or within the first three months of employment. (A form is available on the website: Notice to opt out of pension savings within three months.) For further details on the deadline for submitting this form, please contact your employer.

If you have opted-out of the USS scheme and you would like to rejoin the scheme, you can ask your employer to register you anew at any time. However, your employer has the legal duty to register you in the scheme every three years. This means that you need to opt-out every three years again, if you wish.

A5. What about variable-time workers and those who wish to take maternity/paternity/family leave?

Variable-time employees are employees who do not have fixed hours. However, they are treated as full-time workers regarding the salary threshold and concerning their option to join the USS pension scheme. They are automatically eligible to join USS if the normal membership criteria are met. Furthermore, they are also able to join USS if they are employed irregularly, as long as the employer agrees. In order to qualify as this kind of employee (variable time employee) the salary must not be based on a fixed annual or part-time basis. These variable time employees are not automatically made USS members, they must ask to join.

During maternity/paternity/family leave, USS members are covered for the usual benefits for which they qualify. Please read the appropriate factsheet on the USS website entitled ‘Maternity and Family Leave’ for details.

More information on working as a variable-time employee you’ll find in the USS member Guide.

And on the USS website:

A6. Who pays the contributions for my USS pension scheme?

Both the employer and the employee pay contributions. The employer’s share is currently 21,1% and the employee’s share 9,6%, regardless of which USS scheme you are affiliated with.

However, the distinction between the Retirement Income Builder (for earnings up to the threshold of £55,000) and the Investment Builder (for earnings above £55,000) is important for the question in which way and how much of the mentioned shares are invested.

For more information, please refer to the USS Member Guide

Note: During the transition period from 1 April to 30 September 2016 there will have been no differentiation between below and in excess of the income threshold.

A7. Can I claim for a refund of my contributions if I leave the UK?

There is a qualifying service time of 2 years required before you accrue pension benefits. If your membership is terminated within two years of joining, you can generally apply for a refund of your own contributions, less certain tax and National Insurance (NI) deductions. This may however not be possible if the membership was based on a salary sacrifice arrangement.

If leaving after more than two years of USS membership, a cash refund cannot be taken, since you are eligible for a deferred pension and tax-free lump-sum at normal retirement age.

Please be aware that you will not get back the fund value (meaning contributions including any investment returns earned on those contributions) from the Investment Builder section in case of leaving the section after having paid in contributions for only three months.

More detailed information:

A8. What happens if my contract is complete and I begin working elsewhere in the UK?

Depending on your future employer there are a number of possibilities:

8.1 Remaining in the UK with another USS affiliated employer
When moving to another university, higher education institute or other such organisation that is affiliated to USS you can simply transfer the membership to the new employer. If employment is interrupted for less than one calendar month, then there won’t even be any gap in pensionable service. Meaning you will not be treated as having left the scheme at all. In order to ensure that there will be no interruption, you could speed up the process by letting your current employer know who your next employer will be.

To check whether your new employer participates in the scheme, click here:

If there should be a gap, then there may be the option to rejoin the USS scheme.

8.2 Remaining in the UK with another company

Your membership, which has entitled you to USS membership, ends. Therefore, it is not possible to continue to pay in to USS when your employment has ended.

If remaining in the UK there are the 3 following options:

Option 1
If leaving USS within two years of joining, a cash refund of your own contributions (not your employer’s) can usually be done, less deductions as described in A7.

Option 2
You can also leave everything with USS as a “deferred pension benefit” and tax-free lump-sum based on the value of your own contributions, payable upon retirement. Meanwhile, it will continue to increase in value in line with official pensions.

Option 3
The full cash value of your USS benefits can be transferred straight into another approved pension arrangement, e.g. a new employer’s scheme, a personal or stakeholder pension or a buy-out policy, see Question A10.

A9. What happens if my contract is complete and I begin working outside the UK?

If switching to a company outside the UK, ask your new employer whether they or their pension provider are a Qualifying Recognized Overseas Pension Scheme (QROPS) as accepted by Her Majesty’s Revenue and Customs (HMRC). To be a recognised overseas pension scheme it must be regulated as a pension scheme, and be verified for tax purposes in its home country. If so, then a transfer of pension benefits outside the UK may be facilitated.

More information about your current options here:

A10. Can I make use of cross-border transfers (in or out) of the Revised Career Revalued Benefits scheme?

Yes, you can transfer benefits from any pension scheme (domestic or overseas) which was accepted by the HM Revenue and Customs into the Revised Career Revalued Benefits scheme. If they were accepted, they are called Recognised Overseas Pension Schemes (ROPS). Check the list of international pension providers which are qualified as ROPS:

Note: As of 1 October 2016 all transferred benefits can only be paid into the Investment Builder, however, the transferred benefits will not benefit from the employer subsidy of investment management costs unless the transfer-in is from the existing Money purchase additional voluntary contribution arrangement.

More information here:

A11. Can I increase my pension by optional additional contributions?

Yes, it is possible to pay additional contributions into the Investment Builder section as of 1 October 2016. The new section provides an automatic matching mechanism, meaning an additional 1% of your salary will be paid by the employer if the employee decides to make a contribution of at least 1% of his/her salary.

More information:

A12. How to update my personal details?

It is very important that you notify USS of any changes to your name, personal or bank details as well as address in order for your pension to be paid out to you.


You can also download a form called “Change of details” on the USS website:

B. My pension benefits

B1. What are the benefits of USS?

  1. Old-age pension (including Early, Flexible, Normal and Late retirement)
  2. Pensions for spouses/civil partners and dependants (life cover)
  3. Incapacity pension (Illness/ injury or incapacity cover)

The relevant criteria are outlined below:

1. Old-age pension

  • Normal retirement: The normal pension age (NPA) in USS is currently 65. Automatic entitlement to take your full pension ensues (starts) at this age. (This will be increased to 66 by 2020 - in line with the State Pension age.) Your old age pension will be reduced if you retire before the age of 66 when you have service times after 2020.
  • Early retirement: The earliest age for retirement is 55 years unless you are made redundant. It is also possible to retire from age 50 if you have been a member continuously since 5 April 2006. If you retire before the scheme’s NPA (Normal Pension Age) - excluding retirement due to ill-health - any pension will be reduced, because taking benefits early means it will be paid for a longer period of time.
  • Late retirement: It is possible to retire later than the NPA and you can continue paying into USS beyond normal pension age and build up a bigger pension. There is no upper limit on the years of service you can accumulate. If the employee continues to pay into USS then the employer must also make their contribution. Any pension benefit built up at age 65 will be increased (currently by 0.5%) for each month later than age 65 that it is taken.
  • Flexible retirement: With the employer’s agreement up to 80% of USS benefits can be taken, provided you agree to reduce your hours and therefore salary by at least 20%. It is possible to take your pension in two stages and continue working. Pensions will be reduced for early payment if they are being drawn before the scheme’s normal pension age.

2. Pensions for spouses/civil partners and dependants

  • On your death during retirement, there would continue to be a pension for your spouse/civil partner. This pension would be equivalent to half the value of your standard pension when you retired. If you are a member of one section but are not married, nor a partner within a civil partnership, a pension may be payable to a financial dependant. This is at the discretion of the trustee company. A lump- sum is payable under certain conditions. There would also be support payments for eligible children, normally up to age 18 (or up to age 23 if in approved full-time education or training), or for eligible children deemed physically or mentally incapable of being self-supporting, regardless of their age.

3. Illness/injury or incapacity cover

  • If unable to continue working because of long-term illness or injury, you can apply for a pension for life and a tax-free lump sum. The amount you would receive depends on whether you stopped working because you’re totally or partially incapacitated. To qualify you must have been a USS member for an aggregate of 2 years, be under the age of 65 and be - in the opinion of the employer - suffering from long-term sickness or infirmity. Special conditions apply if a medical condition was known when the member joined USS. This is a very complex subject. For more detailed information please refer to the link below:

More information: USS Member Guide, chapter “when can you retire”

B2. Is there a qualifying period to be entitled to a pension?

There is a minimum period of 2 years of service times before benefits from employer’s contributions can be accrued. If leaving before this period, it is possible to apply for:

  • a refund of your own contributions, see Question A7
  • a deferred pension and lump-sum which bases on the value of your contributions
  • a transfer of the value of your full benefits to another approved pension arrangement, see Question A10

However, this minimum period does not need to be uninterrupted. The pension benefits will continue to be built up if you transfer to another USS affiliated employer, or if you return to USS in the future.
More information on the USS website:

B3. How high can I expect my pension to be?

Your pension benefits are based on your annual salary earned.
The accrual of retirement benefits is different in the two sections; the Retirement Income Builder for earnings up to the threshold of £55,000 and the Investment Builder for earnings above the threshold.

  • Retirement Income Builder (until 30 September 2016 regardless of the pensionable salary; as of 1 October 2016 for earnings up till the threshold of £55,000)

For each year of service you accrue a pension of 1/75 of the pensionable salary and a tax-free cash* lump-sum of 3/75 of your salary. You have the option to take more or less as a lump-sum and receive a lower or higher pension, see Question C4.
Your accrued benefits for that year are calculated at the end of each year and added to previous years. More detailed information here:
*Tax-free cash is a lump-sum payment that is received upon retirement; it is equal to the value of the pension multiplied by 3.
Be aware: The retirement income from USS is, of course, in addition to the state pension or any benefits you may also be entitled to from the state social security system. Tax is payable on all pensions.

The formula for the Retirement Income Builder, see picture below.

*Note: Until 30 September regardless of the pensionable salary; as of 1 October 2016 for earnings up to the threshold of £55,000. Further information:

  • Example calculation is shown in the USS Member Guide, chapter “How much will be paid when you retire”
  • You can also use the pension calculator:
  • Investment Builder (as of 1 October 2016 for earnings above the threshold of £55,000)

As of 1 October 2016 the Investment Builder is in place. How much benefits you will receive under this section depends on the investment performance. (Concerning the investment strategy, it is possible to choose among a range of options. You can also choose a “Do it for me” - approach. More detailed information here: For more information on your later benefits, as well as a calculation example, check the USS Member Guide.

B4. Can I increase my future pension by paying additional contributions?

See Question A11

C. Nearing retirement

C1. When can I apply for my benefits?

Pension benefits can be claimed upon reaching the requisite retirement age or in the event of partial/total incapacity.

The normal pension age (NPA) in USS is currently 65. Automatic entitlement to take your full pension ensues (starts) at this age. (This will have increased to 66 by 2020.)

Find out your State Pension age:

The earliest age for retirement is 55 years unless you are made redundant. It is also possible to retire from age 50 if you have been a member continuously since 5 April 2006. If you retire before the scheme’s NPA - excluding retirement due to ill-health - any pension will be reduced, because taking benefits early means it will be paid for a longer period of time. More information on early retirement in Question B1.

C2. Where do I apply for a pension?

Please contact the USS Retirement team. They will give you more information or check the website.

C3. How high can I expect my pension to be?

See Question B3

C4. How will my pension be paid out?

You’ll receive your accrued pension entitlements as a monthly pension payment and in addition a one-off tax-free lump-sum pay out. However, you have the option to take more or less cash as your lump-sum and thus a higher or lower monthly pension. Your options are explained in the USS Tax-free cash option Guide.

Your benefits are paid out on the 21st day of the month and is paid into your bank or building society account.

If moving abroad all USS benefits stay the same. It is necessary to keep a UK bank or building society account into which USS can pay the monthly pension. If, however, you’d like your pension payments to go directly into your overseas account, further information can be obtained from the USS pensions’ payroll section.

More information available under “How will my pension be paid if I move abroad?” here:

C5. How to update my details?

See Question A12