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  3. OSPS
  4. Opting Out

Opting Out

Things to consider before opting out of OSPS

Before deciding to opt out you should bear in mind that you would be giving up valuable benefits plus a significant contribution from your employer. Remember that your employer can refuse to let you join again if you opt out.

The list at the bottom of the page gives some common reasons for opting out. Please read them before deciding to opt out in case you wish to reconsider.

Opting out of Investment Builder

  • It is NOT possible to opt out in advance.
  • You cannot fill in a form to opt out from the start. Forms OPT2 and OPT2DC are not valid.
  • We will NOT accept any forms for opting out from the start.
  • New joiners will get a starter letter at their home address from Legal and General at the end of the month in which they are enrolled, usually the month of their first deduction. For University employees this will be the address held on the HR system. Please ensure that this has your correct address so that you will receive the letter.
  • The letter will give a deadline of about one month for opting out online or by calling 0345 026 892. If you do this before the deadline you will get a refund.
  • After this deadline it is possible to withdraw from the scheme using form OPT2DC (pdf) but there will be no refunds. DO NOT USE THIS FORM TO OPT OUT FROM THE START AND GET A REFUND. Send this to the the Pensions Office (if you work for the University) or your employer if you work for one of the colleges.

See also the relevant section on the Investment Builder page.

Opting out of Defined Benefit (DB) section

  • You should think very carefully before opting out of the DB section as you would be giving up extremely valuable benefits.
  • You will NOT be able to rejoin the DB section if you change your mind - you would have to go into Investment Builder.
  • If you do want to opt out please complete and return form OPT2 to the the Pensions Office (if you work for the University) or your employer if you work for one of the colleges.

 

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Remember that if you are in the scheme you pay less tax. If you pay tax the real cost can be about 80% of the cost you see on your payslip. There are additional savings if your employer uses salary exchange.

If you are in the DB section consider changing to the lower cost plan. You can change your cost plan from 1 April by completing form APP6 before the end of March.

If you are in tier 2 or tier 3 in Investment Builder consider changing to tier 1. You can change your tier from 1 April by completing form APP6DC before the end of March.

 

You can pay into more than one pension scheme at the same time.

If you are paying into a personal pension then your employer is not paying any money into it. However, if you contribute to OSPS the employer contributes a significant amount as well.

When you leave you should be able to transfer your OSPS benefits to your personal pension. A year’s membership of Investment Builder in tier one at £20,000 per annum salary could generate a fund value of around £2,000 (actual figure will depend on investment returns and charges). This would cost you £640 net allowing for tax relief at 20%.

Use the Investment Builder calculator (xlsx) to see how it works for you.

Even if you are in the scheme for a short time you will build up benefits in the scheme. If you cannot keep them in OSPS you should be able to transfer them to a new employer’s scheme or a personal pension. If you opt out you are giving up the benefit of your employer’s contribution towards your retirement.

If you are in OSPS long enough to keep the benefits with us then you can either transfer them to a pension scheme abroad (subject to some restrictions from HMRC) or we can pay you the pension to you in the country in which you are living. In many cases we can pay the pension into your account in that country.

If you opt out you are giving up:

  • inflation-linked pension for life (DB section only);
  • significant employer contributions;
  • ill health cover if you can no longer work;
  • death benefits for your family; and
  • depending on your employer, you may lose the opportunity to join the scheme again.
     

The Trust Deed and Rules of OSPS take precedence over anything said on this page.

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Cost and benefit calculators

Contact Us

 : Pensions Office
       University of Oxford
       6 Worcester Street
       Oxford OX1 2BX

 : OSPS - osps@admin.ox.ac.uk
 : (01865) 616133 or 616020

 

 

 
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