Additional Pension Contributions (APCs)
If you want to buy extra pension for your retirement you have the option of paying APCs. In some circumstances you can buy back lost pension (for example where you have a period of authorised unpaid leave) where your employer must also pay towards buying back this lost pension if you decide to buy it within 30 days of returning to work.
If you are in the main section of the Scheme, you can pay more in contributions to buy up to £6,500 of extra pension. Any extra pension you purchase is payable each year in retirement and is payable on top of your normal LGPS benefits.
You can normally pay for this extra pension either regularly over a complete number of years directly from your pay or via a lump sum (either from your pay or directly to your Pension Fund). The minimum period of time you can spread payment of APCs over is 12 months and the maximum period is the number of years to your Normal Pension Age.
Any extra regular contributions are taken from your pay and if you pay tax, you receive tax relief automatically through the payroll.
You can choose to stop paying APCs at any time by notifying your Pension Fund in writing. You will be credited with the extra pension that you have paid for at the time of ceasing payment.
The cost of any extra pension you buy is paid for by you unless your employer chooses to pay some or all of the cost of the APC. Shared cost APCs (except in cases where a member chooses to buy lost pension within 30 days of returning to work) are an employer discretion.
If you choose to retire early (before your Normal Pension Age) the extra pension you have bought will be reduced for early payment. If you choose to draw your pension after your Normal Pension Age any extra pension you buy is increased because it’s being paid later.
On retirement, you can choose to exchange some of the extra pension you have bought for a tax-free cash lump sum in the same way as your main LGPS pension.
If you die in service then no extra benefits from your APC contract will be payable. This is because the amount of extra pension you purchase is for you only.
You may be required to undergo a medical examination at your own expense before being allowed to buy extra pension.
Additional Voluntary contributions (AVCs)
What is an Additional Voluntary Contribution?
Additional Voluntary Contributions (AVCs) are extra payments you can choose to make to build up a fund that will provide a pension, at retirement, in addition to your Local Government pension.
The Fund has undertaken a review of the range of AVC investment fund choices available with Standard Life. Based on advice from its pension advisers, the Fund has selected an expanded range of fund options for members to choose from.
Details of the new range of funds are set out in the Standard Life AVC booklet entitled Standard Life Your Investment Choices (PDF, 505.28 KB). All members are welcome to take a look at this booklet, even if they have not previously invested in AVCs.
How much can I pay?
The maximum a member may pay into the in house AVC to 100% of your salary. You may change your payments at any time. Your payments will be invested in one or more of Standard Life’s range of investment funds. This amendment came into force on 1st April 2014.
How can I make an AVC?
Please contact us on 01926 412682 or complete the attached ‘AVC request form’. Contributions will be deducted from your salary by your employer via Payroll and, as with your pension contributions to the main Fund, your AVCs also currently attract tax relief at your highest marginal rate (subject to the annual and lifetime allowances).Additional Voluntary Contribution Form (DOCX, 38.79 KB)
What happens when I retire?
At retirement, your fund can be used to buy a pension from Standard Life or another life assurance company of your choosing. You will also have the option of converting your AVC fund to additional pension in the Local Government Pension Scheme.
For further information visit the Standard Life website (user ID is LGPS) or call 0845 279 8831.