USS Prudential Facility
Money Purchase Arrangement
Historically, USS have used The Prudential to administer a money purchase AVC arrangement as an alternative to the existing AVC offered by USS at the time. With the introduction of USS Investment Builder on 1 October 2016 this arrangement has ceased.
Importantly, member who were contributing to the With-Profits Fund have been able to elect to continue paying contributions until 30 September 2019.
What is a With-Profits fund?
In brief, the With-Profits Fund held with Prudential aims to provide growth for members’ pension savings but without directly linking this to the rise and fall of investment markets.
A broad range of investments are held in the fund. The costs of running the With-Profits Fund are deducted and the remaining amount (if any) (called “the profit”) is available to be added to members’ pension savings.
The profits (if any) are distributed in the form of bonuses to members using a ‘smoothing’ technique.
You can find out more about the With-Profits Fund by reading the guide to With-Profits published by Prudential.
If you currently pay voluntary life assurance premiums as part of the MPAVC arrangement, these will continue unless you decide otherwise.
Money purchase AVC funds already built up
USS has no plans to transfer existing With-Profits Fund and Deposit fund into the USS Investment Builder unless you make a positive election to do so. However for those funds other than With-Profits Fund and Deposit fund (referred to as ‘unit-linked funds’) there will be a gradual transition to the USS Investment Builder. To clarify:
- With-Profits funds and Deposit funds which have been built up until 30 September 2016 will remain invested in Prudential unless you actively request a transfer of those funds across to the USS Investment Builder. This is because there are specific underlying features embedded within these funds which means the case for making an automatic transfer of the funds already built up is not as straightforward as it is for other funds. Please see the With-Profits Fund and Deposit Fund factsheets for further information.
- Unit linked funds which have been built up until 30 September 2016 will be transferred over to the USS Investment Builder automatically. This will take place over a period of time, some months after 1 October 2016. This transfer is expected to start in 2017. USS is in the process of determining the most appropriate date. This transfer will be automatic and funds built up will be mapped to an equivalent fund in the USS Investment Builder. You will have the option to select a different fund to transfer to if you wish.
If you are interested in making AVC’s to your pension please use the My USS facility.