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Author Topic: Did you join the pensions scheme?  (Read 4255 times)
randomlife
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Posts: 41


« on: April 11, 2012, 5:40:14 AM »

I think I'm gonna die before 65, should I consider opt out my pensions scheme?

Seriously, how many of you joined USS? What are the up and downsides?
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wegie
Unemployed & unemployable
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Posts: 11,617


« Reply #1 on: April 11, 2012, 6:09:46 AM »

I think I'm gonna die before 65, should I consider opt out my pensions scheme?

The balance of probabilities says this is not the case. Academics are one of the longest-lived groups of people around. Unless you have a specific medical condition that will get you before you retire, you can expect to party on into your 80s

Seriously, how many of you joined USS? What are the up and downsides?

I think most of us, except those who are at post-92s that are still part of the Teacher's Pension Scheme, are members of USS.

Upsides: it's a defined benefit scheme. Not many of those left around. It's transferable across all the other public sector pension schemes (very useful if you move to a post-92 in the Teacher's Scheme) or are in one of the bio-medical fields that can live in either a university or the NHS.

Downsides: the level of benefits is relatively stingy and getting worse. Basing your payout on 1/80 was fine when people could get their first academic job without a PhD or even without a Master's: it was still easy enough to do 40 years. The move to an average salary payout rather than a final salary payout also takes down the level of payment. If you leave the scheme in the first two years, all you get back is what you put in, not what the university put in as well. The investment policy sucks (but I've ranted enough about that in the past, and hopefully Dr Pangloss' successor won't be quite such a moron).

In general, I would say that at the moment, the upsides still outweigh the downsides, and will do so for the next few years. After that, my crystal ball goes all murky and starts muttering about too many possible futures.
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observer3
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Posts: 487


« Reply #2 on: April 12, 2012, 1:55:45 PM »

You should probably only opt out if you are going to invest that same money in another comparable scheme. Unless you do actually have a medical condition as above.
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