As a member of the Local Government Pension Scheme (LGPS), you can elect to pay extra pension contributions to increase your retirement benefits. This can be done by buying additional pension in the LGPS, or by paying Additional Voluntary Contributions (AVC’s) into the Fund’s in-house AVC provider. Additional Pension Contributions (APCs) You can elect to buy additional pension by paying APCs either:
- over a period of time (minimum 1 year up to your Normal Pension Age), or
- by paying in a one-off lump sum
The maximum amount of additional pension you can buy from April 2014 is £6,500 (this figure will increase each year in line with the cost of living).
The amount it costs depends on how much additional pension you want to buy, the age you start ppaying the additional contributions and the length of time you want to pay them for.
At the end of each Scheme year (1 April – 31 March), or at the date the APC contract is terminated, if sooner, your pension account will be credited with the amount of additional pension bought in that year.
As contracts are deemed to be paid in full if you are retired on Tier 1 or Tier 2 ill-health or die in service, a medical certificate must be provided from your Doctor, stating that you are in ‘reasonably good health’ before the contract can commence.
You can use the link here to an on-line calculator which will show how much it would cost to buy additional pension.
If you decide to proceed with the purchase, please print off and sign the application form and forward to the Pension Section. A medical certificate will be required as proof that you are of good health with regard to your age and details will be sent to you upon receipt of the application form. alternatively, please contact the Pension Section for confirmation of the APCs you would have to pay.
If you decide to proceed with the purchase, further details regarding the medical certificate required as proof that you are of good health with regard to your age will be sent to you
Additional Voluntary Contributions (AVC)
All Local Government Pension Funds have an in-house Additional Voluntary Scheme (AVC) where you can invest money, deducted directly from your pay.
The City and County of Swansea Pension Fund has chosen Prudential as its in-house AVC provider.
You pay into AVCs by making contributions directly from your pay. You decide how much you can afford. For new AVC contracts taken out from 1 April 2014 you can pay up to 100% of your pay towards an AVC, after allowing for any pension and National Insurance liability or any other existing deductions you may have. For any AVC contracts which were taken out before 1 April 2014 the limit of 50% of your pay remains in place. Please note, tax implications would apply where the growth in pension benefits, including any AVCs paid, exceeds £40,000 in one year.
You can pay a percentage of your pay, so the amount will go up as your pay goes up, or you can pay a set amount. You can change the amount you pay at any time. AVC funds should grow as they are invested, although you should be aware that the value of your fund can go down as well as up and you may not get back the amount invested.
At retirement, you may convert the AVC Fund into an additional amount of pension, or choose to take the AVC fund as a tax free lump sum ( subject to HMRC limits).
For more details about investing in an in-house AVC, please contact Prudential, who have a dedicated team to help you with any questions you may have with regard to AVCs. They may be contacted on 0845 607 0077 or alternatively, further information is available on www.pru.co.uk/rz/localgov/england-wales/.
The Prudential website allows you to join or increase your AVC online. The online facility;
- Allows you to start your AVC
- Allows you to increase your AVC
- Is quick, easy and secure
- Is ready for you 24 hours a day
You can also pay in-house AVCs to provide additional life cover. Your LGPS membership already gives you cover of 3 times your pay if you die in service, but you can increase this or use it to provide additional benefits for your Survivors in the event of your death in service. This may be subject to satisfactory completion of a medical questionnaire.
You can also pay pension contributions to a Personal Pension Plan, a Stakeholder Pension Plan or a Free Standing Additional Voluntary Contribution (FSAVC) Plan at the same time as paying into the LGPS provided that your total contributions do not exceed 100% of your total taxable earnings. You would choose the provider and make all the arrangements directly with them, not through the LGPS.