USS pension scheme: early retirement factors changing

The Universities Superannuation Scheme (USS) is making some changes to early retirement factors, meaning changes to early retirement benefits.

Earlier this year we highlighted a number of changes to USS, including reduced contribution rates for employers and employees.

There is another change that will come into effect on 1 October 2024, this time impacting the factors used to calculate members’ payments if they take early retirement.

What is early retirement? 

The normal pension age is currently 66, but colleagues can choose to retire early once they reach the minimum age of 55.

If you choose to retire early, USS calculates what your monthly and yearly pension payments would be based on ‘actuarial factors’ – estimates using national demographic and economic data.

The amount of money you receive in a pension will be less if you retire early than if you'd worked until you are 66, as you'll have had fewer years paying into your pension. Also, the money in your pension will need to be paid out over a longer time period, meaning regular pension payments will be smaller.

What is changing and why? 

On 1 October 2024, USS is changing its early retirement factors, which means you will receive less should you choose to retire early after this date.

Early retirement factors can be changed by the USS Trustee without consultation.

All pension schemes periodically review contribution rates and benefits to ensure retirement payments to members remain affordable.

Support

Further explanation on changes to pension factors and how they might affect you is provided on the USS website.

USS has communicated with all members on the change, via its direct channels and website. Colleagues can access its guidance and financial advice webpage for resources and information on how to access independent financial advice, or visit USS help and support webpage.

It is worth remembering that all pensions are unique to individual circumstances and the impact will not be the same for all members.

Anyone considering early retirement before 1 October is encouraged to seek a quote from USS at the earliest opportunity and to discuss their plans with their line manager.

The University will consider flexibility in notice periods for colleagues who may be significantly impacted by these changes.