Pay and PensionsPensions Handbook

Section 3 of the Pay and Pensions Handbook

3. Pensions

The University provides academic and academic related members of staff, if eligible, with the opportunity to join the Universities Superannuation Scheme (USS).

Non-academic staff, if eligible, have the opportunity to join the University of Glasgow Non-Academic Staff Pension Scheme (NASPS).

Continued active (contributing) membership of the Scottish Teachers Superannuation Scheme (STSS), is automatic to those academic staff at St Andrew’s College, who were in the STSS Scheme immediately before 1 April 1999, and who transferred to an academic post in the Faculty of Education at the University. Eligibility will cease whenever they cease to be employed in such a post at that Faculty.

Continued active membership of the Local Government Pension Scheme (LGPS) is automatic for University employees who were active members of this Scheme immediately before 1 April 1999. Continued membership is not conditional on remaining at a post in the Faculty of Education.

Employees remaining on St Andrew’s College terms and conditions, may join USS and NASPS, as appropriate, only if they accept a University contract on University terms and conditions.

Continued active membership of the National Health Service (NHS) Superannuation Scheme, may be possible for certain new University employees - provided an application to remain within this Scheme is lodged with the NHS within the stipulated time limits. Continued active membership is normally confined to those employees who are employed as lecturers by the University on a contract of two years or less, or who have previously contracted with the NHS Superannuation Scheme to take out added years additional voluntary contributions.

New employees are normally eligible to join either USS or NASPS, and in accordance with CVCP policy established in 1988, it is assumed that all new employees will wish to do so and accordingly automatic and immediate entry into the relevant pension scheme is arranged.

Employees not wishing to join the pension scheme for which they are eligible, need not do so. However, written notice of the intention not to belong to the pension scheme is necessary. An employee may also opt to cease being an active pension scheme member whilst remaining in University service - providing written notice of this intention is given.

Any employee considering opting not to join the relevant University scheme for which he or she is eligible, is asked to bear in mind the benefits being foregone - particularly the death in service and ill-health cover, which can be important even if only a short period of membership is being considered. The University will not contribute, on the member’s behalf, to other than the occupational pension scheme that the member is eligible to join. The level of the University’s contribution, on the member’s behalf, to both USS and NASPS is substantial.

Both USS and NASPS are Final Salary Schemes. This means that the members' benefits are not dependent on investment performance as with money purchase schemes. Instead they are based on length of service, final pensionable salary at retirement, and an annual benefit accrual fraction. Both Schemes operate on the balance of cost principle. This means that individual members pay a fixed percentage of their pensionable salaries into either Scheme. This percentage remains constant irrespective of the requirements of the respective funds. The balance of cost necessary to pay the Scheme benefits, as determined by the actuarial calculation, falls on the University.

Current Superannuation contributions are payable on the full salary as follows:

• USS
  Employee contribution is 6.35% of annual salary
• NASPS
  Employee contribution is 6% of annual salary

At present the State Pension Scheme operates on a two-tier structure. First there is a basic state pension, or old age pension, for which all employees qualify, providing they pay full-rate National Insurance contributions. In addition, there is the State Earnings Related Pension Scheme (SERPS) which was introduced in 1978.

Both USS and NASPS are Contracted Out Schemes. This means that members USS or NASPS do not participate in SERPS. As contracted out Schemes, both must provide pension benefits at least equal to the additional pension which members would have received had they contracted in to SERPS. Lower rates of national insurance contributions are payable as a result of the Schemes being contracted out of SERPS.

Members of the University’s occupational pension schemes are provided with a member's handbook which provides information on the benefit structure of their particular Scheme.

Queries on individual pension issues should be raised in the first instance with the Pensions Section in the Finance Office (internal telephone extension 5366).