Pensions Information for Members of Staff

The University Pensions Office is located on the first floor of the Kingfisher Building on the Brookfield site. If you have any queries regarding pensions please email the University Pensions Manager : Rashida Vora

What pension schemes are provided by the University for members of staff?

The University has established a generous range of pension benefits that are available to its members of staff.

USS

USS

For members of staff on Grade 6 and above, the University participates in the national pension scheme for universities, the Universities Superannuation Scheme (USS) and eligible jobholders in these grades are automatically enrolled into USS. New staff joining USS are automatically entered into the University’s salary sacrifice arrangements.

FriendsLife Stakeholder

FriendsLife Stakeholder

For members of staff on Grades 1 to 5 the relevant pension scheme is the University of Leicester Stakeholder Pension Scheme (FriendsLife scheme). This is a defined contribution pension scheme provided by FriendsLife and eligible jobholders are automatically enrolled.  Members of the FriendsLife scheme on University grades 1 to 5 are also automatically provided with life assurance and permanent health insurance benefits. As from 1st November 2016, all new and existing staff members of the FriendsLife Stakeholder Scheme will automatically entered into the University’s salary sacrifice arrangements provided they meet the earning thresholds.

Membership of the University of Leicester Stakeholder Pension Scheme (FriendsLife scheme) is also available to Casual / Temporary workers, but with some differences to the overall benefits package.  Casual / temporary workers, who join the FriendsLife scheme are NOT provided with life assurance or permanent health insurance benefits.  Casual / temporary workers are also not eligible to participate in the University’s salary sacrifice arrangements.

NHS Pensions

NHS Pensions

New members of staff who were previously members of the NHS Pension Scheme, may be able to re-join this scheme whilst working for the University, subject to the rules of the NHS Scheme.  Members of staff interested in exercising this option should let the Pensions Office know immediately upon joining the University.

PAS

PAS

The University of Leicester Pension and Assurance Scheme (PAS), has been closed to new entrants since 2003 and closed to future accrual on 31st March 2016.

How do I join the appropriate pension scheme?

All University members of staff are entitled to join a University operated pension scheme appropriate to their grade. The mechanics of how they do so will be dependant on a number of factors.

The University automatically assesses all members of staff for pension eligibility and allocates them to one of the following three groups in accordance with pensions auto-enrolment legislation. For USS, the assessment will take place on the first day of employment, whilst for the FriendsLife Scheme the assessment will take place after a postponement period of three months (monthly paid) or 12 weeks (weekly paid).

The classification depends on qualifying earnings and age as follows:

Table1
The three groups are:

Table2
The University will auto-enrol all Eligible Jobholders, (i.e. those members of staff who meet the following criteria), into the appropriate pension scheme. That is members of staff who, on the assessment date:

  • earn over £833 a month (£10,000 a year) (with effect from 6th April 2016)
  • work, or ordinarily work in the UK;
  • are aged 22 or over; and
  • are under the State Pension Age.

Members of staff who do not meet the above criteria will be assessed as either Non Eligible Jobholders or Entitled Workers under the auto-enrolment legislation and will NOT be auto-enrolled into a pension scheme at this time, but will be re-assessed at each pay period and if at that time they meet the criteria as Eligible Jobholders they will be auto-enrolled after a postponement period of either three months (Grade 1 to 5 monthly) or 12 weeks (Grade 1 to 5 weekly paid) or immediately (Grade 6 or above).

Members of staff assessed as either Non Eligible Jobholders or Entitled Workers still have the right to opt in to the appropriate pension scheme with immediate effect if they wish to do so.  They should contact the University Pensions Office if they wish to receive information about joining a pension scheme.

You can find out how Pensions Auto-enrolment legislation might affect you here  

Opting out of a pension scheme

Membership of the University’s pension schemes is not compulsory.  An Eligible Jobholder who is automatically enrolled into a pension scheme may opt out of membership within one month. The statutory information about opting out is contained in the auto-enrolment assessment letter the University sends to a new member after joining the University.

Eligible Jobholders who opt out and other workers who leave a qualifying pension scheme while remaining in the University’s service may be further assessed and re-enrolled at a later date in accordance with legislation, in which case they have a further opportunity to opt out.

If you wish to withdraw from USS outside the opt-out period, and you are participating in the University’s salary sacrifice arrangements you will not be able to get a refund of your employee contributions even if you withdraw within two years of entry into USS. The FriendsLife scheme does not permit refunds beyond the opt-out period.

Re-gradings and internal appointments

A re-grading or an internal appointment may impact on an individual’s auto-enrolment status such that they cross an age and/or earnings trigger, and become an Eligible Jobholder. As such they may cease to be eligible for their current pension scheme and be auto enrolled into the appropriate pension scheme.

Members of Staff not currently in a pension scheme

A member of staff not currently in one of the University’s pension schemes, who either increase their hours or are subject to a change of grade within grades 1 to 5, such that their auto-enrolment assessment status changes, will become subject to auto-enrolment into the FriendsLife scheme.

A member of staff not currently in one of the University’s pension schemes, whose post is re-graded to grade 6 or above or who takes an internal appointment at grade 6 or above will become subject to auto-enrolment into USS.

Members of Staff currently in FriendsLife scheme

Where re-gradings or internal appointments involve crossing the grading threshold between eligibility for the FriendsLife scheme or USS (i.e. between grade 5 or below and grade 6 and above), the FriendsLife scheme will cease to be their pension scheme and they will be enrolled into membership of USS with immediate effect.
They will receive a statement from FriendsLife outlining the options available to them in relation to their accumulated fund. These options will include: maintaining the pension as a preserved benefit; continuing to make contributions on a personal basis; or transferring the accumulated fund into another pension scheme. USS accepts transfers from stakeholder pension schemes (such as the FriendsLife scheme) subject to certain conditions and staff may wish to contact USS to explore this option.

What benefits will I receive from the pension scheme and what are the costs of joining?

USS

As from 1st April 2016, the existing Final Salary and CRB streams of USS ceased. From this date a new interim defined benefit CRB stream was introduced for all USS members with an employee contribution rate set at 8% of salary and an employer contribution rate set at 18%. .  A new defined contribution stream of USS will be introduced from 1st October 2016.

From 1st April 2016, new and existing members of USS will automatically join the USS Retirement Income Builder. This stream of USS is a defined benefit pension scheme where members’ benefits are based on each year’s salary throughout the period of membership. Members will accrue a pension of 1/75th of salary and a cash lump sum of 3/75th of salary for each year of service, up to a salary threshold of £55,000 (the threshold being increased each year by inflation). At the end of each year, members’ benefits for that year are calculated and added to previous year’s benefits. The total is then revalued every year in line with standard pension increases. The main elements of the USS Retirement Income Builder are:-

  • The University currently pays a monthly contribution equal to 18% of members’ pensionable salary while members’ pay 8%
  • Within it are provisions which provide security for members and their dependants
  • Benefits at retirement are based on a formula that takes account of a members salary each year and also takes account of inflation.

For members who earn over the £55,000 threshold, contributions on the balance of their salary above the threshold will go into the USS Investment Builder, a new defined contribution section of the scheme. Contributions under this section of the scheme are paid into an individual pension pot discreet to each member. For employees, the contribution rate into this section will remain at 8% of salary, whilst the University will contribute 12% to your pot from within the overall 18% employer’s contribution.

In addition, ALL members of USS can have access to the USS Investment Builder by paying voluntary contributions into this section. The first 1% of voluntary contribution will be matched by the employer. Any employee contributions above this level are not matched by the employer.

 The main elements of the USS Investment Builder are:

  • It provides flexibility so members can enhance their retirement savings with a match from the University.
  • Benefits at retirement are based on the contributions made by the member and the University to the USS Investment Builder and the performance of the funds that the contributions are invested in.

To make voluntary contributions into the USS Investment Builder members must complete the MyUSS registration on the USS members website. Once registered, members will then be able to elect whether they wish simply to take the "1% Match" or whether they wish to make further additional contributions. Elections made before the 11th of each month will be processed in that month's payroll run (i.e. elections made between 11th September and 10th October will be processed in the October payroll).  USS rules do not permit retrospective changes to USS Investment Builder elections.

University of Leicester Stakeholder Pension Scheme (FriendsLife Scheme)

The FriendsLife scheme is a defined contribution pension plan which works as follows:

  • On joining, a new member is issued with a personal investment plan which is specifically for their own pension benefits. At the time of retirement the money in a members’ fund will be used to provide benefits for the member and/or their dependants. In addition, University staff on grades 1 to 5 who are members of the FriendsLife scheme also receive life assurance and permanent health insurance cover.
  • Both the member and the University pay contributions into the policy.
  • New member’s of the Scheme:
    • are automatically enrolled in the University’s salary sacrifice arrangements (effective from 1st November 2016);
    • are initially enrolled onto Tier 1 of the Scheme with contributions payable in line with Table A below; and
    • have their contributions initially allocated to the Scheme’s default investment fund, the FriendsLife ‘My Future’ Fund.

Having joined the FriendsLife Scheme, members have the following options available:

  • They can elect to opt out of the University’s salary sacrifice arrangements. Pension contributions would then be payable in accordance with Table B below.
  • They can elect to join a different Tier of the FriendsLife scheme, which would increase your contribution rate. The University would also increase its contributions accordingly.
  • They can select a different investment fund, or funds, from the range offered by FriendsLife.

 Table A: Contributions under FriendsLIfe Stakeholder (Salary Sacrifice)

Table A

Table B: Contributions under FriendsLIfe Scheme (Non-Salary Sacrifice)

Table B

For more details about the costs and benefits of being a member of the FriendsLife Stakeholder Scheme please see  the Members Handbook

Pensions Salary sacrifice arrangements at the University

The University operates pensions salary sacrifice arrangements for USS, and the FriendsLife stakeholder pension schemes. Further information is available at the following link together with forms to allow employees to opt out of the salary sacrifice arrangements.

Further Information

If you have any queries or would like further information please contact the  University Pensions Office.

You will be provided with additional information regarding the benefits provided by the relevant pension scheme shortly after you join the scheme.  

 

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