Defined Benefit Section
Information for current members of OSPS who joined the scheme before 1 October 2017.
Note:
If you joined OSPS on or after 1 October 2017 you should look at the Investment Builder page as the rest of this page is not relevant to you.
If you joined OSPS before 1 October 2017 you are in the Defined Benefit (DB) section.
The DB section includes:
- the Final Salary section for benefits accrued up to 31 December 2012;
- the CARE section for benefits accrued from 1 January 2013.
Benefits information
The Trust Deed and Rules of OSPS take precedence over anything said on this page.
Lump sum
In most cases this will be three times your salary at the time of your death.
The beneficiary or beneficiaries are at the complete discretion of the trustees. This means that the payment will be tax free.
We strongly recommend that you complete nomination form NOM1 (pdf) to give the name(s) of those who you would like to receive the money. You can nominate more than one person if you like. This form will help the trustees make their decision. You should update this form if your circumstances change.
Adult dependents
The following are automatically entitled to receive a pension on your death:
- your spouse; or
- your civil partner.
The following may receive a pension at the trustees’ discretion:
- an unmarried partner with whom you are living as if you were married or civil partners;
- any other adult who is wholly or partly dependent on you, perhaps due to disability or old age.
If you have someone in this situation we recommend that you nominate them on a Registration of potential dependants NOM3 form (pdf).
If there is more than one adult dependent the trustees will decide how to distribute the pension.
We enhance your pension to your Normal Retirement Date. Your dependent will get a proportion of this enhanced pension: two-thirds of the final salary pension and one half of the CARE pension.
Children
The following are automatically entitled to receive a child allowance:
- all of your children who are under age 18; or
- any other dependent children under age 18 who are treated as a child of your family.
Older children may receive a child allowance at the trustees’ discretion if they:
- are under age 23 and in full-time education; or
- are unable to earn their own living at any age due to disability.
If you have a child in this situation we recommend that you nominate them on a Registration of potential dependants NOM3 form (pdf).
We enhance your pension to your Normal Retirement Date. Your child/children will get a proportion of this enhanced pension. The amount each child receives depends on the number of children and whether or not there is also an adult dependent.
OSPS Sections
The Defined Benefit (DB) section includes:
- the Final Salary section for benefits accrued up to 31 December 2012;
- the CARE section for benefits accrued from 1 January 2013.
Normal Retirement Date (NRD)
We use your NRD to calculate your benefits, in particular whether you are claiming your benefits early or late. You do not have to retire at your NRD. Your employment retirement date is a matter between you and your employer. The University’s policy for support staff can be found here.
Your NRD is defined as follows:
- if you were born before 1 January 1948 it is 31 December 2012;
- if not, it is the later of age 65 and your state pension age in whole years;
- for benefits in the final salary section it is age 65.
You can work out your state pension age by using the Government's state pension calculator.
When you can retire
If you joined OSPS before 1 August 2004
You can claim benefits from age 50.
If you are an active member your benefits would not be reduced after age 60. If you are a deferred member your benefits would not be reduced after age 65 for Final Salary section benefits and your CARE benefits would not be reduced after your NRD.
If you joined OSPS between 1 August 2004 and 5 April 2006
You can claim benefits from age 50.
Your benefits would not be reduced after age 65 for Final Salary section benefits. CARE benefits would not be reduced after your NRD.
If you joined OSPS on or after 6 April 2006
You can claim benefits from age 55.
Your benefits would not be reduced after age 65 for Final Salary section benefits. CARE benefits would not be reduced after your NRD.
Please note that the above does not always apply to additional benefits bought through Additional Voluntary Contributions (AVCs) or to transfers in.
Benefits transferred in after 1 August 2004 are not paid in full until age 65 in the Final Salary Section, or until NRD for the CARE section.
Please contact the Pensions Office for more information on Final Salary AVCs.
Early and late retirement
If you take your benefits before the date they are due in full (this may vary for different elements), then we will reduce them by an early retirement factor. For example, if you retire five years early the reduction is currently 20%.
If you take your benefits after NRD (this may vary for different elements), then we will enhance them by a late retirement factor. Currently this is about 5.3% for each year you take the benefits late.
For more information, please contact the Pensions Office (01865) 616133.
Retirement process (active members)
Please note that, unless you are taking flexible retirement, you cannot claim your benefits until you have left the service of your employer.
The retirement process is as follows:
- you give your notice in to your employer;
- your employer sends us the Advance Notification of Retirement RET1(U) (pdf) for the University, or RET1 (pdf) for colleges as soon as possible;
- not more than three months in advance we will send you a statement giving your options and enclosing forms for you to complete;
- if we have received correctly completed forms we will set up payment of your benefits for your retirement date.
Retirement process (preserved members)
The retirement process is as follows:
- not more than three months in advance of your NRD (or upon request) we will send you a statement giving your options and enclosing forms for you to complete;
- if we have received correctly completed forms we will set up payment of your benefits for your retirement date.
- Please note that if you have opted out or moved to USS then you cannot claim your preserved benefits until you have left the employer concerned.
Benefits options
On your retirement statement we will give you three options:
- standard pension and cash
- maximum cash
- no cash
You can also ask for figures for specific pension and cash figures subject to the maximum limits.
If you have money-purchase benefits in the scheme, either as Prudential AVCs or the OSPS bonus or the DC section, we will include these in your statement. You do have the option to take these benefits separately.
Payments of benefits
We will pay the lump sum into your account on the first working day after your retirement date, provided we have received all the necessary forms in time.
Your pension will be paid through the University payroll. The payment date is the last but one working day of each month.
Flexible retirement
If your employer agrees, you can reduce your hours by 20% or more and then claim 20% to 80% of your payable benefits at the same time.
If you work for the University, the department should follow the procedure given on the HR website and send us the appropriate forms including the advanced notification of retirement form RET1(U) (pdf)
If you work for a college they should have their own procedure, but you may find the information for University staff useful. If the college agrees they should send us form RET1 (pdf) giving the requested information.
Ill health retirement
If you are too ill to do your current job or a financially comparable job until your NRD then you can apply to the trustees for an enhanced pension.
The process is as follows:
- contact the Pensions Office for an application form;
- return the form to the Pensions Office giving details of a GP and consultant willing to provide medical evidence;
- we will contact your employer for your job description and confirmation that they support your application;
- we will obtain medical reports from your doctors and put your case to the trustees;
- finally we will let you and your employer know the decision.
If the application is agreed, you then need to follow the normal retirement process.
If your life expectancy is less than one year you might be able to claim your benefits as a single lump sum. This is called serious ill health commutation.
How benefits build up in the DB section of OSPS.
Cost plans
If you joined OSPS before 1 October 2017 you are in the DB section and currently build up benefits on a Career Average Revalued Earnings (CARE) basis. This means that each scheme year (April to March) we give you a pension equal to a proportion of your pensionable salary. You also get a tax free lump sum which is three times the value of the pension. The proportion used is called the ‘accrual rate’ and depends on your cost plan.
If you were in the scheme before 1 January 2013 or transferred benefits in after this date from a Public Sector Transfer Club scheme you will also have final salary benefits.
You can choose between three cost plans; Lower, Standard and Higher. They all have different contribution rates and build up benefits at different rates.
For the current contribution rates, please see the How much does OSPS cost section on this page.
You can change your cost plan from any 1 April by sending form APP6 to the Pensions Office before 31 March.
Revaluation of CARE benefits
The benefits you are given each year increase in line with inflation We then add these up to calculate your total benefits.
CARE benefits are revalued at the end of the scheme year after which you built them up. In other words benefits built up between April 2018 and March 2019 will be increased from April 2020.
As at April 2024 the Trustee's policy on increases for active members is as follows, but this may change in the future:
Accrued pre-1 April 2018
Joined scheme before 1 February 2013 RPI (8% cap)
Joined on or after 1 February 2013 RPICPI (8% cap)
Accrued after 1 April 2018
All members CPI (8% cap)
RPICPI means the average of RPI and CPI.
Example of CARE build up
This is a simple example, which ignores the different rates that apply to CARE pension built up before and after 1 April 2018.
At the end of year 1
| Year | Salary | Cost Plan | Pension Built up | Increase | Total |
|---|---|---|---|---|---|
| 1 | £20,000 | Lower | £222 | N/A | £222 |
At the end of year 2
| Year | Salary | Cost Plan | Pension Built Up | Increase | Total |
|---|---|---|---|---|---|
| 1 | £20,000 | Lower | £222 | £0 | £222 |
| 2 | £20,500 | Standard | £241 | £N/A | £241 |
Total pension at end of year 2 is £463 per annum (£222 plus £241).
In this example, the member has chosen to move to the Standard cost plan at the start of year 2.
At the end of year 3
| Year | Salary | Cost Plan | Pension Built Up | Increase | Total |
|---|---|---|---|---|---|
| 1 | £20,000 | Lower | £222 | £7 | £229 |
| 2 | £20,500 | Standard | £241 | £0 | £241 |
| 3 | £21,000 | Higher | £262 | N/A | £262 |
Inflation is 3%. The increase on the year 1 pension is therefore 3% of £222, which is £7.
Total pension at end of year 3 is £732 per annum.
In this example, the member has chosen to move from the Standard cost plan to the Higher cost plan at the start of year 3.
At the end of year 4:
| Year | Salary | Cost Plan | Pension Built Up | Increase | Total |
|---|---|---|---|---|---|
| 1 | £20,000 | Lower | £229 | £5 | £234 |
| 2 | £20,500 | Standard | £241 | £5 | £246 |
| 3 | £21,000 | Higher | £262 | £0 | £262 |
| 4 | £22,000 | Higher | £275 | N/A | £275 |
Inflation is 2%. The increase on the year 1 pension is therefore 2% of £229, which is £5, and for the year 2 pension it is 2% of £241, which is £5.
The total pension at the end of year 4 is therefore £1,017. There would also be a lump sum of £3,051 or three times the pension.
Final salary benefits
If you were in the scheme before 1 January 2013, or have transferred in final salary benefits from a Public Sector Transfer Club scheme, you will have final salary benefits.
Up to 31 March 2018, these were linked to salary increases. From 1 April 2018, the final salary link was broken, and these benefits go up in line with inflation each April. Please see the Final Salary members page for more details.
Annual benefit statements
Every year we will send you a benefit statement giving you the current value of your benefits.
Information for members who leave the Defined Benefit section of OSPS.
If you joined OSPS before 1 October 2017 you are in the DB section.
If you joined OSPS after 1 October 2017 you should look at the Investment Builder page as the rest of this page is not relevant to you.
You will leave the DB section if:
- you leave your pensionable employment and do not rejoin OSPS within one month;
- you no longer have a support staff role;
- you choose to opt out of OSPS; or
- you reach age 75.
Options
The benefits you can receive depend on the length of your qualifying service. For most people qualifying service is the same as the length of time they have been in the scheme. However, it might be different if you have been in the scheme before or have transferred benefits in.
Up to three months qualifying service
- a refund of contributions less deductions; or
- or a transfer of contributions to another pension scheme
Between three months and two years qualifying service
- a refund of contributions less deductions; or
- a transfer of the cash equivalent transfer value (CETV) to another pension scheme
Two or more years qualifying service
- preserved benefits in the scheme;
- a transfer of the cash equivalent transfer value (CETV) to another pension scheme
For further information on what is meant by a refund of contributions and a transfer please see the sections below.
If you are over your NRD you cannot take a refund of contributions. You have to claim your benefits or transfer them out (with trustee approval).
Suspended benefits
If you leave without preserved benefits your benefits are ‘suspended’. This is because we do not know whether you wish to have a transfer or a refund. When you leave we will send you a letter giving the refund value and the transfer value and an option form.
Refund of contributions
If you choose to take a refund, we will pay out your contributions less short service refund tax (usually 20%).
Please note that contributions paid through Salary Exchange cannot be refunded.
No interest will be added if you delay claiming a refund.
Transfer of benefits
In simple terms the Cash Equivalent Transfer Value (CETV) is the amount of money we think we need to hold now to provide your benefits at NRD. We calculate the CETV in accordance with the instructions given by the scheme actuary and these may change periodically.
The CETV is guaranteed for three months. If the benefits are transferred out after this we will recalculate it.
The transfer value we pay is not always the CETV. A summary of what we will pay is shown below.
Leavers before 6 April 2006
- employee contributions not taken under salary exchange if you have suspended benefits; or
- CETV if you have preserved benefits.
Leavers after 6 April 2006
- employee contributions not taken under salary exchange if you have less than three months qualifying service; or
- CETV if you have more than three months qualifying service.
Transfer process
If you want to transfer your benefits to a new pension scheme you should contact them first and ask them about their transfer process. Not all pension schemes accept transfers.
We will not pay your benefits to another pension scheme until you and the new scheme have signed the appropriate paperwork.
Preserved benefits
This means that you can keep the benefits in the scheme until you either claim them or transfer them out to a new pension scheme. Preserved benefits go up in line with inflation. The trustees decide the level of inflation to be applied to each type of benefit.
When you leave we will send you a statement of your preserved benefits. If you keep the benefits with OSPS you will get an update sent to you each year as long as we know your address.
Please see the past members page for more information.
Retirement
If you are old enough and are entitled to preserved benefits you could claim your benefits in most circumstances. Please see the Retirement section for more information.
Further information
For more information about what you can do with your benefits once you have left please see the past members page.
A guide for members who have benefits in the Final Salary section of OSPS.
If you were in the scheme before 1 January 2013 you will have Final Salary section benefits. Benefits built up after 1 January 2013 will be in the CARE section.
If you transferred in final salary benefits from a Public Sector Transfer Club scheme at any time you would also have final salary section benefits.
Calculations
Final salary benefits are based on your Final Pensionable Salary (FPS) and your Pensionable Service (PS). In most cases the benefits are calculated as follows:
Pension is FPS x PS / 80
Lump sum is 3 x FPS x PS / 80
Final Pensionable Salary and Pensionable Service are defined on the Special Terms page.
If you were in the scheme before 6 April 1995 we will deduct an amount equivalent to value of SERPS we think you will get from the state pension scheme. This is called the SERPS offset.
If you retire after age 65 we will calculate your final salary benefits as at age 65 and enhance them to your date of retirement. This would be 31 December 2012 if you were born before 1 January 1948.
Please note that for active members under 65 as at 31 March 2018 the FPS is calculated as at 31 March 2018. This is because the final salary link was broken as at 31 March 2018. These benefits are then revalued in line with inflation - see section below for more information.
AVCS
Some members have contracts to purchase additional service in the final salary section. These contracts have due dates between age 60 and 31 July before age 66. The benefits from these contracts are usually calculated based on their due date and reduced or enhanced from there as applicable.
If you would like further information please contact the Pensions Office.
Dependents' pensions
An adult dependent will get two-thirds of final salary section pensions.
Pension increases
Final salary benefits (excluding AVCs) fixed at 31 March 2018 will increase in line with the average of RPI and CPI each April, starting with April 2019. The lump sum element will not be increased by inflation beyond age 65.
Both the pension and lump sum will be increased by a late retirement factor if they are deferred beyond age 65 in accordance with the scheme rules.
Choice of cost plans
Members who joined after 1 October 2017 should refer to the Investment Builder pages.
When considering the cost of the scheme you should remember that pension contributions are tax deductible. This means that if you pay tax, the government is paying part of your contribution for you.
You can choose between three cost plans; Lower, Standard and Higher. They have different contribution rates and build up benefits at different rates, as per the below table (rates from 1 April 2024).
| Contribution Rate | Accrual Rate | |
|---|---|---|
| Higher | 7.8% | 1/80 |
| Standard | 6.6% | 1/85 |
| Lower | 5.6% | 1/90 |
Current members can change their cost plan from any 1 April by sending Change of cost plan form APP6 (pdf) to the Pensions Office before 31 March. You can see how the changes in cost plan rates will affect your pay using the OSPS Cost Plan Modeller (xlsx).
The real cost
If you pay tax and/or NI you will pay less of both if you are in the scheme. Here is an example for an employee on £2,000 gross per month using standard tax rates for 2019/20.
| Standard Cost Plan | |
|---|---|
| Gross Pay | £2,000 |
| Pension | £160 |
| Tax relief | £32 |
| Cost from take home pay | £128 |
In this case the real cost is £128 per month not the £160 that appears on the payslip. The cost would be less if this member were in Salary Exchange due to NI Savings.
Salary exchange
The University and some colleges use Salary Exchange for employee contributions. If you are in Salary Exchange your employer pays your pension contributions and reduces your pay by the same amount. This means that if you take a refund on leaving any contributions taken through Salary Exchange cannot be refunded.
If you are a University employee think you might want a refund upon leaving you should strongly consider signing and returning the Salary Exchange opt out form within three months of joining. You should send this form to the University payroll office.
If you are an employee of a college that operates Salary Exchange you should contact them about their opt out procedure.
Employer contributions
The employers support the scheme by paying significant contributions. The level of employer contributions is decided at the scheme valuation which takes places every three years. As at October 2023 the employers pay 16.5% in contributions.
If you joined OSPS after 1 October 2017 you are in Investment Builder. If you joined before that you are in the Defined Benefit or CARE section.
Opting out
If you are a new joiner of OSPS you will be in Investment Builder, which is largely administered by Legal and General. You cannot opt out of this advance. There is no paper form you can complete to opt out from the start. If you have been given OPT1 it is no longer valid.
If you want to opt out of Investment Builder from the start you have to wait for your starter letter from Legal and General. You will have about one month from the date of the letter to log on and opt out online and get a refund.
OPT2DC (pdf) - Use this form to withdraw from Investment Builder after the above deadline. You will not get a refund. We will not accept this form to opt out from the start.
OPT2 (pdf) - Use this form to opt out of the CARE section (ie you joined OSPS before 1 October 2017). If you do this you will NOT be able to rejoin the CARE section.
Nomination forms
NOM1 (pdf) Word version - use this if you are an active member
NOM2 (pdf) - use this if you are a pensioner
NOM4 (pdf) - use this if you are a deferred member
NOM3 (pdf) - use this to nominate for dependent's' pension
Contributions forms
APP5DC (pdf) - Change of tier for new Investment Builder members
APP6 (pdf) - Annual change of cost plan for CARE section members
APP6DC (pdf) - Biannual change of tier for Investment Builder members
APP4DC (pdf) - Application to join Investment Builder
AVC1 (pdf) - Application to pay additional contributions to Investment Builder
Other forms
TVIN1 (pdf) - Transfer in inquiry form (from defined contribution schemes only)
CHA3 (pdf) - Change of address or bank details for leavers
SUS1 (pdf) - Options on leaving for Defined Benefit members (Investment Builder members cannot claim refunds)
INFSH (pdf) - Defined Benefit Section summary for members
INFSHDC (pdf) - Investment Builder summary for members
Investment Builder leaflet (pdf)
Please report any broken links to [email protected].
Guidance on contributions during maternity, family leave, sick leave and other unpaid leave
This applies to members of the Defined Benefit section and those in Investment Builder.
Maternity and other family leave
If you go onto reduced pay due to maternity or other family leave the following will happen:
- you pay contributions on the pay you receive;
- your employer pays the difference between your contributions and the total contributions needed by the scheme.
This means that the employer will pay a much higher amount than normal towards your pension.
If you go onto unpaid leave neither you nor your employer will pay any contributions. When you return you will have the opportunity to pay the contributions you would have paid if you had been working normally. If you pay your contributions the employer has to pay their share.
Sick leave
If you go onto reduced pay due to sick leave you and your employer have to pay the contributions due on your full pay.
If this would cause hardship to you, you can write to the Pensions Office and ask for your contributions to be suspended until you return to work.
If you go onto unpaid sick leave neither you nor your employer will pay any contributions. When you return you will have the opportunity to pay the contributions you would have paid if you had been working normally. If you are in the Defined Benefit section you would also have to pay the employer contributions if your employer does not wish to do so. If you are in the Investment Builder section you do not have to pay the employer contributions if your employer does not wish to do so.
Other unpaid leave
This would be the same as for unpaid sick leave (see above section).
Information for members of the Defined Benefit section of OSPS regarding transfers and Additional Voluntary Contributions (AVCs)
If you joined OSPS before 1 October 2017 you are in the DB section.
If you joined OSPS after 1 October 2017 you should look at the Investment Builder page as the rest of this page is not relevant to you.
Transfers In
Members of the DB section can transfer benefits into Investment Builder. These benefits can be combined with their DB section benefits as part of a maximum cash calculation at retirement, but none of the transferred funds can be used to purchase additional pension in the DB section.
Please note that we can only accept transfers from investment-based (DC) schemes, so transfers from LGPS, NHS, USS and other public sector schemes are not possible. The only exception is if the alternative is a refund of contributions.
AVCs
You can pay in more than your normal contributions if you wish. These are called Additional Voluntary Contributions or AVCs. If you want to pay AVCs to OSPS the only option is to pay them into Investment Builder. You can apply to do this on form AVC1 (pdf).
The maximum you can pay is your total salary less your other contributions, including AVCs paid to OSPS or other pension schemes.
Contributions limits
The maximum you can pay is your total salary less your other contributions, including AVCs paid to OSPS or other pension schemes.
Investment builder
Investment Builder is the defined contribution section of OSPS run mainly by Legal and General.
You can pay AVCs as a regular amount or as a lump sum or both.
At retirement you can either combine your Investment Builder funds with your DB section benefits to purchase additional benefits or claim them separately.
Your Investment Builder funds can be transferred out separately to your main scheme benefits if you wish. You can do this even if you are an active member.
Please contact the Pensions Office if you want more information.
Prudential
A few members of the DB section pay AVCs to Prudential. This option is no longer open.
At retirement you can either combine your Prudential funds with your DB section benefits to purchase additional benefits or claim them separately.
Your Prudential funds can be transferred out separately to your main scheme benefits if you wish. You can do this even if you are an active member.
Please contact the Pensions Office if you want more information.
Care AVCS
Between January 2013 and 31 March 2017, it was possible to purchase additional pension and lump sum in the CARE section. If you have one of these contracts please contact the Pensions Office for more information.
Final salary ACVS
Before 1 January 2013 it was possible to buy additional benefits in the final salary section. A few members still have these contracts and they are subject to different rules based on the date they started. If you have one of these contracts please contact the Pensions Office for more information.
Annual allowance
The government restricts the total amount of pension benefits you can build up each year without paying a tax charge. This is called the Annual Allowance. Please see the Government advice on Annual Allowance for more information.
Contact Us
University of Oxford
Great Clarendon Street
OSPS - [email protected]
(01865) 616020