THE ROYAL FREE HOSPITAL SCHOOL OF MEDICINE
PENSION AND ASSURANCE SCHEME
A Guide to the proposed transfer of Members to the Superannuation
Arrangements of the University of London for Current Active Members
Introduction
The covering letter, dated 29 March 2012, has set out the proposals from University
College London (UCL) for the transfer of the benefits of the members of The Royal
Free Hospital School of Medicine Pension and Assurance Scheme (the Scheme)
into the Superannuation Arrangements of the University of London (SAUL). This
Guide provides further, more detailed information about the proposed transfer,
including the effect it would have on your pension benefits.
Providing now for your retirement is extremely important. Doing so through an
employer-sponsored pension scheme helps you to build financial security for the
future. UCL is committed to providing employees with pension and life assurance
benefits that are of significant value. However, in doing so, it is important that a
sensible plan is in place that allows both UCL and current Scheme members to
provide for pensions in the future in a way which is both affordable and manageable.
UCL has spent a considerable amount of time reviewing the options for the future of
the Scheme, with a view to better managing cost. A transfer into SAUL of the
members' benefits is the preferred way forward as this enables you to continue to
enjoy and build up final salary pension benefits and for both you and UCL to benefit
from the efficiencies and economies of scale that merger into SAUL offers.
This Guide takes you through the proposed changes in relation to the transfer
of benefits to SAUL, and for future benefit accrual. Please read it carefully to
ensure that you understand fully the proposals being made.
Inside you will find
What you need to do
About this Guide
Step 1 – The proposed transfer in brief
Step 2 – Your pension in SAUL
Step 3 – A comparison of the Scheme and SAUL benefits
Step 4 – What happens next?
Frequently asked questions
Page
2
2
4
5
6
13
14
This Guide gives a summary of benefits currently provided under the Scheme and
SAUL, which are both governed by a formal Trust Deed and Rules. Should the
benefits set out in this Guide or any other Scheme or SAUL booklet be inconsistent
with the relevant scheme’s Trust Deed and Rules, the Trust Deed and Rules will
prevail.
1
What you need to do
Read this Guide and the enclosed SAUL booklet carefully.
Make a note of any questions and anything that needs clarifying.
Attend a presentation – you will receive details shortly.
Feed back any comments or queries to UCL as part of the consultation process before
28 May 2012.
Look out for any answers to frequently asked questions and any other information that
may be published during the consultation period.
Look out for an announcement from UCL at the end of the consultation period regarding
its decision.
About this Guide
In putting together the information contained in this Guide, we have tried to structure
it in a way which:
helps you to understand how your pension benefits are calculated and the
pension provision that is proposed for the future;
allows you to locate and refer back to the issues which are of most interest to
you; and
in general terms, helps you to understand the effect of the transfer on the
benefits you have earned to date.
2
It may help if you think of this as a series of steps, each of which is set out on the
following pages:
Step 1 – The proposed transfer in brief
Firstly, we summarise the changes proposed by UCL, as already broadly set out in
the covering letter dated 29 March 2012 (page 4).
Step 2 – Your pension in SAUL
Then, we explain in more detail the terms which would apply to you under SAUL
(page 5).
Step 3 – A comparison of the Scheme and SAUL benefits
We then set out the key Scheme and SAUL benefits side by side so you can see how
they compare (pages 6-12).
Step 4 – What happens next?
Finally, we set out what you need to do now and what you can expect to happen next
(pages 13-14).
By following these four steps, you will be able to understand how UCL’s proposals
apply to you both in terms of the pension benefits you have built up to date and the
pension benefits may build up in the future.
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Step 1 – The proposed transfer in brief
This is a summary of what UCL proposes will happen.
Transfer into SAUL
All of the Scheme’s assets will be transferred into SAUL.
The financial obligation relating to members’ past or accrued benefits will be
transferred to SAUL.
You will not be able to earn future service benefits in the Scheme.
Your Scheme benefits
You will stop building up further pension benefits in the Scheme with effect
from 30 June 2012.
The pension benefits you have earned in the Scheme up to 30 June 2012 will
be transferred to SAUL.
The benefits that you have earned up until 30 June 2012 will be converted to
the current SAUL benefit basis. The main change to the structure of your
benefits is that in SAUL you will be provided with a pension, based upon
1/80th of final salary for each year of service, and a separate additional taxfree lump sum at retirement, which is the standard form of benefits offered by
SAUL. The existing Scheme provides a pension based on 1/60th of final
salary, and the choice of converting part of that pension to a lump sum. The
Scheme Trustee will ensure that the overall value of your benefits earned up
until 30 June 2012, as assessed by the Scheme actuary, will remain the same
upon transfer into SAUL.
The normal pension age in SAUL is the last day of the month before your 65th
birthday. However, the current SAUL rules allow retirement at age 60 or later
without actuarial reduction of your benefits.
Your future service pension
From 30 June 2012, your future service pension benefits will accrue in SAUL.
This will ensure that you continue to benefit from:
A pension based on your service (both as a member of the Scheme
and of SAUL) and final salary;
A significant UCL contribution towards your pension benefits;
Valuable benefits payable in the event of your death;
In the event that you are made redundant beyond age 55, no actuarial
adjustment will be made in respect of early payment of pension;
The opportunity to pay extra contributions to provide more benefits for
you and your family when you retire.
A comparison of the current and proposed future arrangements is shown in ‘A
Comparison of the Scheme and SAUL benefits’ on page 6.
4
Step 2 – Your pension in SAUL
The pension that you will earn in SAUL will be linked to your final salary. You will find
enclosed with this pack a separate schedule detailing the benefits you have earned
in the Scheme and the service credit you would be offered in SAUL, if the transfer to
SAUL’s benefit basis goes ahead.
Proposed changes to SAUL
A consultation is currently underway in relation to benefits under SAUL which may
result in new joiners from 1 July 2012 accruing pensionable benefit on a career
average defined benefit basis. However, if you join SAUL at 30 June 2012 under
UCL's current proposal set out above, you would join as a member of SAUL’s final
salary section, and so continue to accrue pensionable benefits linked to your final
salary.
Of course, changes to future service benefits in SAUL could be proposed in future,
affecting both existing and future joiners, in the same way as in the Scheme,
although UCL is not aware of any such proposals at present.
5
Step 3 – A Comparison of the Scheme and SAUL benefits
The table below compares the key features of the benefits that are currently provided
for you in the Scheme and the benefits currently provided in SAUL. Note that this is
intended only as a guide, to help you compare both schemes - the benefits available
under each arrangement will ultimately be those defined in the formal documentation
of each scheme.
Scheme
SAUL
Member
6% of Salary.
6% of Salary.
contributions
Salary exchange not permitted.
Salary exchange offered.
Normal Pension
Age (NPA)
Normal
retirement
pension
60th birthday.
Tax-free cash
sum
A lump sum can be taken by
reducing the normal retirement
pension, up to the permitted
maximum.
Pension of 1/60th of Pensionable
Salary for each year of
Pensionable Service (measured in
years and complete months).
The last day of the month before
your 65th birthday.
Pension of 1/80th of Pensionable
Salary for each year of Pensionable
Service (measured in years and
days).
A lump sum (in addition to the
pension) equal to three times the
annual pension.
Option to increase lump sum to the
permitted maximum, with appropriate
reduction to the pension.
Option to exchange cash sum for
additional pension.
Pensionable
Remuneration /
Salary
The better of (i) your pensionable
salary at the date of retirement or
earlier leaving, or (ii) the Highest
average of Pensionable Salary for
three consecutive years ending on
any Scheme Anniversary Date (1
August) falling within the 10 years
up to Normal Retirement Date or
earlier leaving..
Pensionable Salary is the greater of:
Salary
Basic salary plus London
Weighting Allowance.
Pensionable
Service
The last or only period of years and
complete months of continuous
service as a participating member.
Your Salary is the ordinary pay you
receive from your employer (including
permanent allowances, shift payments
and fixed benefits but not including
one-off payments such as overtime or
bonuses).
The length of time (measured in
years and days) as a contributing
member of SAUL plus the service
credit granted in respect of previous
pensionable service as allowed
under the SAUL scheme rules.
a) your highest Salary paid over
any one of the three years before
you retire (or leave or die); or
b) the highest yearly average of
your Salary in any group of three
years during the 13 years before
you retire (or leave or die).
6
Spouse/civil
partner
Scheme
“Qualifying Widow” means the
widow or widower of your last/only
marriage.
Where marriage occurred within 6
months ofdeath, the Trustees have
a discretion whether to treat your
widow/widower as a Qualifying
Widow.
Child
Qualifying Child:
Natural, adopted, legitimised, step
children, or any other child to
whom you are legally liable to
contribute towards the
maintenance of, except where this
is on the basis of a voluntary
contract or a deed of covenant.
Early retirement
from service
For voluntary retirement from age
55 an early retirement reduction
applies to pension.
SAUL
A spouse means your husband or
wife at the time you die. A civil
partner means your civil partner
within the meaning of the Civil
Partnership Act at the time you die.
The definition of children who are
eligible for benefits includes:
i) your natural or adopted children;
and
ii) any other child who, in the
Trustee’s opinion is your dependant.
Where early retirement is before age
60, pension is reduced except if you
are made redundant and have at
least five years’ Pensionable Service.
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Ill-health early
retirement
Scheme
Pension entitlement is calculated
on the basis of accrued service
and reduced for early payment
before age 60 (other than in the
case of redundancy).
SAUL
An enhanced pension of 1/80th of
Pensionable Salary (calculated for
each year of Pensionable Service
you could have built up if you had
been able to remain in service up to
age 65, to a maximum of 40 years. If
you have already built up 40 years,
your pension will be based on actual
Pensionable Service).
A tax-free lump sum equal to three
times pension.
You must have completed at least
two years’ Pensionable Service and
your employer and the Trustee must
be satisfied you have become
incapable of carrying out your duties
because of permanent ill health or
incapacity.
The Trustee may monitor your health
after you have retired and can
cancel, suspend or reduce your
pension until age 65 if:
i) your health improves;
ii) you take up paid work; or
iii) you refuse a medical examination
If you have less than two years’
Pensionable Service but meet the
other conditions above, you could
leave service and apply for ill-health
retirement as a preserved member
(see below).
Very serious illhealth
retirement
If your employer and the Trustee
are satisfied that you are very
seriously ill, with a life expectancy of
less than one year, you might be
able to take all of your benefits in a
lump sum.
If your employer and the Trustee are
satisfied that you are very seriously
ill, with a life expectancy of less than
one year, you might be able to take
all of your benefits in a lump sum.
If you have at least two years’
Pensionable Service, your benefits
under ill-health retirement (above)
will be converted into a lump sum.
If you have less than two years’
Pensionable Service, your benefits
will be based on your actual
Pensionable Service only (which
means your Pensionable Service will
not be enhanced to age 65).
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Death in service
Scheme
A lump sum of four times Salary,
plus refund of contributions.
SAUL
A lump sum of four times Salary, plus
refund of contributions payable with
interest where you die whilst a
contributing member (or have
stopped contributing having built up
40 years’ Pensionable Service).
A spouse's or civil partner’s pension
of 2/3rds of your pension based on
potential years and complete
months service to age 60 (to a
maximum of 40 years).
A spouse's or civil partner’s pension
of 2/3rds of your pension based on
potential years and days of
Pensionable Service to age 65 (to a
maximum of 40 years).
A pension is payable to children
where a spouse’s or civil partner’s
pension is not paid.
If you do not have a legal spouse or
civil partner, or you are living apart, it
may be possible for the Trustee to
pay a pension to one or more adults
who are financially dependent on
you.
There is a reduction where a
Qualifying Widow is more than 10
years younger than deceased
member.
If your spouse, civil partner or adult
dependant is more than 15 years
younger than you, his or her SAUL
pension will be reduced.
Children’s allowances are also
payable, as follows:
If a spouse’s/civil partner’s or other
adult dependant’s pension is
payable, then:
i) one eligible child is entitled to an
allowance equivalent to half of the
spouse’s pension; or
ii) two or more eligible children are
each entitled to an allowance. The
total allowance paid to two or more
children will equal the value of the
spouse’s pension.
If a spouse’s/civil partner’s or other
adult dependant’s pension is not
payable, then:
i) one eligible child is entitled to the
equivalent of two-thirds of a spouse’s
pension; or
ii) two or more children are each
entitled to an allowance. The total
allowance paid to two or more
children will equal the value of one
and one-third of the spouse’s
pension.
9
Scheme
SAUL
Children’s allowances are payable
for children who are:
i) under age 18; or
ii) between 18 and 23 and in full time
education or attending a full-time
course of training approved by the
Trustee; or
iii) over 18 and permanently unable
to be financially self-supporting due
to a disability.
Death after
retirement
Lump sum based on any remaining
instalments of pension which would
have been paid had the member
survived for five years (ignoring
pension increases which take effect
after the date of death).
Lump sum based on any remaining
instalments of pension which would
have been paid had the member
survived for five years (ignoring
pension increases which take effect
after the date of death).
Spouse's/civil partner’s pension of
2/3rds of your pension at the date of
death.
Spouse's/civil partner’s pension of
2/3rds of your pension, ignoring any
reduction in pension for extra tax-free
cash you might have taken and any
exchange of lump sum for increased
pension unless specifically chosen
by you to be included.
The above pension is payable to
children if there is no spouse/civil
partner.
If you do not have a legal spouse or
civil partner, or you are living apart, it
may be possible for the Trustee to
pay a pension to one or more adults
who are financially dependent on
you.
If your spouse, civil partner or adult
dependant is more than 15 years
younger than you, his or her SAUL
pension will be reduced.
Children’s allowances are also payable
(as detailed above).
Pension
increases
Post 1 August 1989 leavers:
Pre 1988 GMP: greater of RPI
and 5%
Post 1988 Pre 01/08/89 GMP:
greater of RPI and 5%
Post 01/08/89 Pre 22/06/94
GMP: RPI
Post 22/06/94 GMP: 3%
Pre 1 August 1989 Excess: greater
of RPI or 5%
Linked to inflation as determined by
statute (currently CPI) for pension in
excess of GMP.
10
Late retirement
Benefits on
leaving
(preserved
benefits)
Early payment
of preserved
benefits
Early payment
of preserved
benefits due to
ill-health
Scheme
Post 1 August 1989 Excess: RPI
With agreement of UCL.
SAUL
Pension payable at 60 (or such later
date as contributions to Scheme
cease).
Pension payable at 65 (or such later
date as contributions to SAUL cease)
increased to actual retirement by
such amount as Trustee decides is
appropriate (having taken the
actuary's advice).
If you continue to pay contributions,
you will continue to earn additional
Pensionable Service at the same rate
as was applicable before the Normal
Retirement Date. (Pensionable
Service is limited to a maximum 40
years.)
If you continue to pay contributions,
you will continue to earn additional
Pensionable Service (although the
agreement of UCL is required where
you have completed 40 years’
Pensionable Service).
With agreement of UCL.
The payment of life assurance benefit
at the date of death is subject to the
trustees being able to obtain suitable
insurance terms.
Revalued between the date of leaving
and the date of retirement in
accordance with legislation.
Revalued between the date of
leaving and the date of retirement in
accordance with legislation.
Automatic at your request.
Automatic at your request.
No reduction where taken on or
after age 60. Where taken between
ages 55 and 60, reduced by amount
decided by Trustee on actuarial
advice.
No reduction where taken on or after
age 60. Where taken between ages
55 and 60, reduced by amount
decided by Trustee on actuarial
advice.
If you are a preserved member who
has become permanently incapable
of working, you can apply to the
Trustee to have your benefits paid
early from any age. Your benefits
will be reduced on actuarial advice.
If you are a preserved member who
has become permanently incapable
of doing a job similar to the one you
were doing when last working for a
SAUL employer, you can apply to the
Trustee to have your benefits paid
early from any age. Your benefits
will not be reduced or enhanced.
The Trustee may monitor your health
after you have retired and can
cancel, suspend or reduce your
pension until age 65 if:
i) your health improves;
ii) you take up paid work; or
iii) you refuse a medical examination.
Early payment
If you are very seriously ill, with a life
If you are very seriously ill, with a life
11
of preserved
benefits due to
very serious illhealth
Late payment of
preserved
benefit
Death of
preserved
benefit member
Scheme
expectancy of less than one year, you
might be able to take all your benefits
in a lump sum.
SAUL
expectancy of less than one year,
you might be able to take all your
benefits in a lump sum.
Trustee may, at your request, allow
you to postpone taking your
preserved benefits, which will be
increased by the Trustee on
actuarial advice.
Trustee may, at your request, allow
you to postpone taking your
preserved benefits, which will be
increased by the Trustee on actuarial
advice.
A lump sum equal to your
contributions.
A lump sum equal to the greater of:
i) your contributions, plus interest; or
ii) the basic lump sum of three times
your preserved pension at your date
of leaving increased to date of death.
A spouse’s or civil partner’s pension
equal to 2/3rds of your preserved
pension at date of leaving,
increased to the date of death.
A spouse’s or civil partner’s pension
equal to 2/3rds of your preserved
pension at date of leaving, increased
to the date of death.
If you do not have a legal spouse or
civil partner, or you are living apart,
it may be possible for the Trustee to
pay a pension to one or more adults
who are financially dependent on
you.
If you do not have a legal spouse or
civil partner, or you are living apart, it
may be possible for the Trustee to
pay a pension to one or more adults
who are financially dependent on
you.
If your spouse, civil partner or adult
dependant is more than 15 years
younger than you, his or her SAUL
pension will be reduced.
Children’s allowances are also
payable (as detailed above).
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Step 4 – What happens next?
The issue of this Guide and covering letter dated 29 March 2012 marks the start of
the consultation period on UCL’s proposals. This will run for 60 days. During this
time, you can feed back your queries and comments on UCL’s proposals to UCL, by
communicating directly with Fenella Needham, UCL Pension Manager, Gower
Street, London WC1E 6BT (e-mail: f.needham@ucl.ac.uk) or if you wish, via one of
UCL’s recognised trade unions, as follows:
UNISON:
UNITE:
UCU:
Bill Lehm – w.lehm@ucl.ac.uk
Colin Skeete – c.skeete@ucl.ac.uk
Tamsin Piper – t.piper@ucl.ac.uk
Sean Wallis – s.wallis@ucl.ac.uk
The purpose of this consultation is for you to be able to express your opinion about
the proposed changes. UCL will then take its decision and respond formally to your
views.
There are a number of other ways you can get more information about UCL’s
proposals.

UCL will be holding presentations about the proposals at a meeting to be hald at
2.30 pm on Wednesday, 18 April 2012. Please make a note of any questions that
you have after reading this Guide and bring them along to the meeting.

You have 60 days from the start of the consultation process (see above) to
submit comments, queries or counter proposals to UCL either directly, or via one
of the recognised trades unions (see above).
Updates on the consultation process, including any frequently asked questions, will
be given throughout the process, and can be found on UCL’s web pages at:
http://www.ucl.ac.uk/hr/pensions/scheme_rfh/
UCL will consider the issues raised during consultation before making a final decision
on the changes that will be made. UCL’s proposal is that the transfer into SAUL will
take effect from 30 June 2012.
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Frequently asked questions
We set out below some frequently asked questions that may help you understand the
proposed changes better.
Is everyone affected in the same way?
All members of the Scheme, irrespective of where they work and how senior they
are, will have their benefits transferred into SAUL under the proposals. In respect of
past service, the active members and deferred members will have their benefits
converted onto the SAUL basis. Pensioners will continue to receive the pensions
already in payment, and any future increases will be determined on the basis of the
relevant Scheme rules.
Why is this happening?
The Scheme closed to new members in August 1998, and now has only 22 active
members. By transferring to SAUL, the Scheme’s members would become part of a
large, well-run fund allowing UCL to save on the time, administration and expense
involved in the provision of an important benefit for members and their dependants.
How do I know that my interests are safeguarded?
UCL has carefully considered a range of options as part of its review of the future of
the Scheme. UCL has discussed its proposals with the Scheme Trustee who has
taken independent professional advice on UCL’s proposal and the way in which it
has been communicated to you in order to ensure that you are able to comment on
the proposals.
Why has SAUL been chosen as the home for all benefits?
SAUL is a large well-run pension scheme and UCL already participates in SAUL to
provide pension benefits for many of its employees.
Are any assets being paid back to UCL?
No – on the contrary, it is anticipated that UCL will be required by SAUL to make a
lump-sum payment to ensure that the value of assets transferred match the funding
level of SAUL. If it were the case that assets remained after the transfer to SAUL,
these will be held under trust and UCL would not have assets paid to it.
Can I carry on paying additional voluntary contributions?
Yes. If you are currently paying AVCs you will be contacted separately about the
extra benefits your contributions will secure in SAUL.
14
When will the transfer happen?
The transfer is proposed to occur on 30 June 2012.
What happens if I do not wish to join SAUL?
Even if you decide that you don’t want to join SAUL for future benefit accrual the
benefits you accrued in the Scheme up to 30 June 2012 will be transferred to SAUL
and converted to the SAUL basis. Those accrued benefits will be preserved until
such time as you decide to take your pension. You will have the option to join
whichever pension scheme is appropriate to your grade, but your pension entitlement
is likely to be on a CARE basis.
Where can I get more information about SAUL?
There is a lot of information about SAUL on their dedicated website, www.saul.org.uk
and in the enclosed booklet.
What is the timetable now? What do I have to do?
Consultation commences with the issue of this information pack on 29 March 2012
and will continue for 60 days, ending on Monday, 28 May 2012.
If you have any views or comments that you would like to be heard as part of the
consultation process, please contact UCL direct, or alternatively a trade union
representative – details of contact names and e-mail addresses can be found on
page 13 of this Guide. You should also look out for your invitation to a presentation
about the proposals that will be held on 18 April 2012.
29 March 2012
15