HQ have recently fielded a number of queries from branch oficials asking for help in answering member queries about their USS pension in relation to job threats and the risk of redundancy at their institution.
The pension officer has circulated the following Q&A’s commonly asked about in this regard; they are published here for your information and guidance.
Can I access my USS pension if made redundant?
Normal USS rules for accessing your pension apply whether you resign, accept voluntary redundancy or are made compulsory redundant. You must be over age 55 (increasing to 57 in 2028) to access your pension and if you are under normal pension age – 60 for pre-2011 service, 60 or 63.5 for service between 2011 and 2020, 65 from 2020 to 2022 and 66 from 2022- early retirement factors will apply where your pension is reduced for claiming it early.
Exception – If a member has a Protected Pension Age (PPA) they may be eligible to access their pension from age 50.
Protected Pension Age Criteria for eligibility
If you are aged 50 or more, with five years’ service, are made redundant and you have been paying into USS continuously since 5 April 2006, you will be entitled to access your pension from age 50. Source – https://www.uss.co.uk/financial-advisers
Can I get redundancy and ill-health retirement?
In order to get ill-health retirement as an active member, you must be under normal pension age (66), be paying into USS for at least two years and suffer from a long-term illness in the view of your employer and USS. You will not be considered for ill-health retirement if you have left your job for any reason other than your illness. Redundancy is not normally considered as a reason for leaving other than your illness.
Active & Proportionate Indexation
Under Rule 10 of the USS Scheme Rules, your pension is increased each year by inflation under what we know as the Soft Cap. When you retire on a date other than 31 March, USS must apply a scheme rule to calculate your pension entitlement. This date can have a negative or positive impact on your pension.
Essentially, if you are made redundant on 30 March 2026 or before, USS will apply an inflation rate of 1.7% (CPI value at Sept. 2024) to your pension entitlement up to the date of leaving. If you are made redundant on 31 March 2026 or after, USS will apply an inflation rate of 3.8% (CPI value at Sept. 2025) to your pension entitlement.
Is it better to leave at the start or end of the month?
Members can get a small benefit if they leave early in a month rather than at the end. If a redundancy date is in the first part of the month, their pension indexation prior to leaving will be estimated as if they left at the end of that month. So a member leaving on 31 March 2026 will have pension indexation up to date of leaving calculated until 31 March 2026 while a member leaving on 01 April will have pension calculated until 30 April 2026.
Pre-2011 Service and 60th Birthday
There is a group of members known as ‘exempt members’ who retain age 63 ½ (or earlier Contracted Pension Age) in respect of service from 1 April 1995 onwards. Exempt members are final salary members who were members on 30 September 2011 and aged 55 or over at 1 October 2011, and were exempt from the changes to Normal Pension Age – to broadly align with state pension age from 01 October 2011.
Basically, if you are an exempt member, have this pre-2011 service and access your pension before age 60, early retirement factors apply. These reductions are significant and can reduce your pre-2011 service by up to 18%.
For further advice
You can read more on UCU website by following this link, or alternatively email any questions you have to pensions@ucu.org.uk.