ROYAL FREE HMS PENSION AND ASSURANCE SCHEME
(the “Scheme”)
Consultation on UCL’s proposal to transfer benefits in the
Scheme to SAUL: Frequently asked questions
Last updated: 22 May 2012
We set out below some frequently asked questions that may help you understand the
proposed changes better.
Can I get any additional advice on the effect the proposed change will have on
my benefits?
If you have any questions on the effect that the proposed changes will have on your
benefits, you should consider taking independent financial advice. If you wish you
can seek advice from your own IFA or find your own IFA by visiting the IFA
Promotion website www.unbiased.co.uk. Please note that an IFA may charge you for
any advice given and UCL will not meet this cost.
If I cease being an active member of SAUL at age 60 or beyond, can I defer
taking an immediate pension?
Yes, if you cease being an active member at age 60 or beyond, you may delay
drawing your pension to a later date. Your pension will be increased by statutory
increases. However, a decision to delay taking a pension beyond age 60 will not
result in any actuarial uplift.
What happens in SAUL if I decide to defer my pension benefits after 30 June
2012 and do not take a pension?
In the situation where your benefits have transferred into SAUL, and in the future you
decide to defer your accrued benefits rather than take a pension, then if you decide
to take a pension before age 65 the element of your pension relating to pensionable
service after 30 June 2012 will be subject to actuarial reduction. If you are an active
member of SAUL and retire at age 60 or beyond, then no actuarial reduction will
apply.
Is there a limit on the number of years’ pensionable service that I may accrue
before taking a pension?
There is no limit in SAUL on the number of years’ pensionable service that you can
accrue, although individuals are not permitted to accrue pensionable service beyond
age 75.
What options are open to me relating to the payment of a lump-sum on
retirement?
Under the current Scheme rules you are eligible to a pension based 1/60th of your
final salary for each year of pensionable service. You would be able to request the
payment of a lump-sum, up to the maximum permitted in law, with an appropriate
reduction to pension. The transfer of benefits into SAUL would result in your pension
being calculated on the basis of 1/80th of final salary for each year of pensionable
service, plus a lump-sum of three times pension. You may request all or part of the
lump-sum to be converted to pension, or alternatively request that a greater lumpsum is paid, up to the maximum permitted in law, with a corresponding reduction to
your pension entitlement.
How does PensionsExchange affect me?
UCL operates a salary sacrifice arrangement which has the effect of reducing the
amount of national insurance an individual pays each month, resulting in an increase
in take home pay. This arrangement is fully supported by SAUL and USS (but has
not been adopted by the Scheme). If the transfer of benefits into SAUL goes ahead,
active members will automatically be placed into the pensions exchange
arrangement – this will result in your contributions to SAUL (at 6%) being reduced to
nil (excluding AVCs) and UCL will make payments equivalent to those that would be
payable by the individual, together with its employer’s contribution, and your gross
salary will be reduced by the amount equivalent to the individuals contribution. You
are able to opt out of the pensions exchange arrangement by requesting this in
writing to Human Resources. Further details are available on the HR web pages at:
http://www.ucl.ac.uk/hr/pensions/pensionexchange/index.php
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.
How will the Trustee Board operate under SAUL?
SAUL Trustee Company is both Trustee and administrator of the Superannuation
Arrangements of the University of London (SAUL). Its Board is responsible for
looking after the Scheme and making sure it is run in line with current legislation and
the Scheme’s own Trust Deed & Rules. The Board is made up of: five members
appointed by the Council of the University of London; four members appointed by the
recognised trade unions UNISON and UNITE the Union (two each); and three
directors appointed by the Board and approved by the employer side and union side
of SAUL’s Negotiating Committee.
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.
When will the merger 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
What is the timetable now? What do I have to do?
Consultation commenced with the issue of the Guide and covering letter 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 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