University of Aberdeen Superannuation & Life Assurance Scheme (UASLAS)

Questions11 June 2013

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Questions

Question 1 How many people have joined the scheme since auto-

enrolment began?

181 automatically enrolled from 1 May 2013– 74 opted out before contributions were taken– also others who have missed the deadline

3 requests to join from non eligible members 2 existing members have requested to withdraw

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Question 2 Due to auto enrolment, with a potential  increase in

active members, the University’s contributions will also increase, and so increase the University’s pay role bill.– What impact does this have on University’s finance

and– does this change the University’s view on scheme

viability?

Irene Bews to respond on behalf of the University

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Question 3 We are aware of a failed pension payment due to a

systems failure at Prudential last year. It would appear that there is no single point of contact for pensioners to direct their queries. – Could we identify who that contact should be, and

make it public?

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Question 3

Prudential failure to pay direct debit payments one month to some pensioners.

Did not just affect UASLAS.

Prudential rectified the problem as quickly as they could. Recorded message on their telephone line explaining the

problem and what was being done to sort it out.

There is no nominated point of contact but a call centre.

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Question 4 The service offered by Prudential since they moved the

Stirling telephone number to the call centre is atrocious.  They deny you exist when you phone and that is after

being on for over an hour and passed to different departments.  I have been transferred to the USS AVC department as well as the active member’s administrators. 

Can we look at moving the pensioner payroll to another administrator?

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Question 4

Prudential have been looking into call centre problems. We understand that call handlers are to be given extra

training to help them more effectively– identify plan type and – deal with calls from UASLAS members... but

Please keep providing feedback– To enable us to put pressure on Prudential to improve

service Trustees can consider moving pensioner payroll but

– May be costly– Could require moving “live” administration also

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Question 5 Page 2 in short report, Returns on Investment, column

two– should it be 2011/2012 and not 2010/2011?

Yes

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Question 6 Page 2 in short report, Income – University Contribution

for 2011/2012 is £159,945 less than 2010/2011 despite there being 17 extra active members. – Is this because there are fewer staff above grade 4

than before?

Scheme year 2011/12:– 78 new entrants– 61 exits (10 retired, 33 deferred, 17 refunds, 1 death)

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Question 6 More detailed look at contributions paid:

£000 2011/12 2010/11

University 2,190 2,199

Members (salary sacrifice)

839 886

Sub-totals 3,029 3,085

University additional (early retirements)

- 70

University death-in-service costs

94 128

Totals 3,123 3,283

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Question 7 Is it possible to tell us how state pensions post 2016 (i.e.

when the flat rate starts) will be affected bearing in mind UASLAS is contracted out:– for members who are already receiving their

superannuation prior to 2016 but will not receive their state pension until post 2016?

– and– for members who will not be in receipt of both until

after 2016?

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Question 7 State Pension is independent of Scheme benefits Changes to a member’s State Pension

– Not affected by when member retires from UASLAS– Depend only on individual’s State Pension date

Summary of changes:Before 6 April 2016 From 6 April 2016

State Pension that applies Current (SPA before 6 April 2016)

Single-tier(SPA on/after 6 April 2016)

Contracting-out Ongoing Ceases

NI contributions for employers/employees

Contracted-out rates Full rates

UASLAS benefits* Not affected Not affected

*But most employers expected to review benefits in light of increased NI contributions

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Transitional arrangements– NI records translated into single-tier pension at

inception “foundation amount”

– Deduction made for contracted-out service Similar to current position A contracted-out member would not receive the full

SERPS/S2P pension– If (reduced) “foundation amount” is below full single-

tier pension Further State Penison accrual possible

– If greater than full single-tier pension No extra State pension from subsequent qualifying years But any excess is “protected” and added to single-tier

pension at State Pension Age

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Question 8 Can we have some clarification on death benefits if you

are single and a parent of children over 18.  – What exactly does “Trustees discretion mean”?

Death benefits:– Lump sum multiple of salary– Lump sum refund of contributions– Dependant’s pension is payable to surviving children

Until youngest child reaches age 23

Above assumes member is active Can provide more specific answer separately if not the case

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Question 8

“Trustees discretion” is required for UASLAS to be a “qualifying” Scheme for tax purposes

On death of a member Trustees– Consider a member’s wishes (nomination form)– But cannot be bound by a member’s wishes

Usually most relevant to lump sum payments In practice trustees typically follow members’ wishes

– But may consider other factors also E.g. nomination may have been completed some years

earlier Member’s circumstances altered since then

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Question 9 I am a single deferred with no dependants.

– Can I nominate a friend as a dependant?  – What happens to the refund of contributions in my

case should I die before I retire?– Can I nominate anyone to recover them or only a

spouses, partner or child?

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Question 9 Can I nominate a friend as a dependant?  Can I nominate anyone to recover them or only a

spouses, partner or child?

Lump sum is payable to one or more “Beneficiaries” This includes “any person nominated by the Member as

a Beneficiary”– But Trustees not bound by this nomination

So– Yes can nominate a friend or someone else as a

“Beneficiary”– Not necessarily spouses, partner or child

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Question 9 What happens to the refund of contributions in my case

should I die before I retire?

Payment made at Trustees’ discretion

Trustees will consider nomination form Possibly other relevant information also

– E.g. member’s circumstances

If no nomination form / dependants– Payment most likely to member’s “legal personal

representatives” (i.e. estate)

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Question 10 Does Prudential have to provide the AVCs as they no

longer provide any support to us.

To be discussed as part of the Trustees meeting