Royal Free HSM Pension and
Assurance Scheme
Informal meeting with members on
Thursday, 1 March 2012
Jack Foster, Director – Special Projects
Extn 48223; e-mail: j.foster@ucl.ac.uk
Purpose of Meeting
• Informal meeting to communicate to
members about exploratory work being
undertaken by UCL staff
• Wish to allay fears that members might
have
• Have invited the trustee and pensions
lawyer to respond to questions
• No decisions have been made – UCL is
considering the options
Sustainability of Scheme
• Funding position of scheme has deteriorated
from deficit of £1.5M in 2000 to deficit £12.5M in
2009
• Employer contributions 33.6%
• Administrative costs £250k p.a.
• UCL annual contribution of £2.3M
• Compares with employer’s contributions in
SAUL of 13%
• Backdrop of review of ‘final salary’ schemes
generally
Review of Future Options
• UCL Finance Committee have asked to explore
options for the future
• Early discussions with SAUL indicate transfer of
benefits may be possible
• Desire to retain ‘final salary’ link
• Desire robust and secure alternative scheme
(SAUL has 2,000 UCL members)
• SAUL is larger scheme so has the resources to
be a more efficient/effective scheme
Preferred Option
• Accrued pension benefits into SAUL
• Benefits converted to SAUL’s basis (i.e. 1/80ths,
plus cash)
• The capital value of past service benefits taken
as a whole will not be lost
• Future benefits with SAUL accrue under ‘final
salary’ rules
• If it goes ahead, transfer needs to occur before 1
July 2012
• Existing RF scheme to be wound up at the end
The Process
• UCL undertaking more preparatory work to see
if the preferred option works
• If UCL goes ahead, accrued benefits to be
converted to SAUL basis on ‘bulk’ transfer basis
• Formal consultation process to start
• Members informed individually of conversion
rate on transfer of benefits to SAUL
• Transfer to occur on basis of Actuary’s certificate
The Process (continued)
• Following consultation, final decisions
made by trustee and employer
• Pension Fund assets transferred to SAUL,
with UCL paying additional lump sum for
any shortfall
• If the process moves forward, benefits of
active and deferred members
automatically convert to SAUL basis
• Pensioners continue to be paid under RF
Scheme rules