AVCs and SCAVCs
Additional Voluntary Contributions (AVCs) allow you to pay more to build up extra savings for retirement. Shropshire County Pension Fund’s ‘In-House’ AVC provider is Prudential.
AVCs are extra payments you can make into your Local Government Pension Scheme (LGPS) pension. These contributions are separate from your main LGPS pension and are designed to help you build up additional savings for retirement.
You can pay up to 100% of your pensionable pay into an 'In-House' AVC plan in each job where you pay into the LGPS. Your contribution will be taken out of your next available pay period, before tax, once your election has been accepted.
To find out more about AVCs, please visit their website. A link to their website can be found under 'Related Links'.
Our two largest employers Shropshire Council and Telford and Wrekin Council also offer a Shared Cost AVC Arrangement.
A Shared Cost AVC is an AVC plan arranged through the LGPS that both you and your employer contribute to.
Under this sort of arrangement, you would pay lower national insurance contributions as well as getting tax relief on the AVC contributions. Your employer would also pay reduced national insurance contributions.
If you are interested in the Shared Cost, AVC Arrangement the relevant application forms available via their employee benefit platforms at Shropshire or Wrekin Councils.
The contact number for the AVC member support team is 0345 6000 343. They can’t give you advice but they can give you more information, chat to you about your personal situation and help answer questions you may have about AVCs.
Using their online service members can manage and keep track of their AVC, including increase, decrease, stop and re-start contributions and make changes to their fund choices.
Requesting information regarding your AVC plan
If you are an active or deferred member of the scheme and are considering, or have decided, what to do with your AVC plan, you can request more information from us tailored to you. We can provide you with your rights and options under the scheme dependent on your age and reason for leaving.
Furthermore, when you request a retirement quote we’ll also send you information regarding your AVC plan.
Prudential have their own website for managing and keeping track of your AVC online, including the option to increase, decrease, stop and re-start contributions and make changes to fund choices. Members can apply for an AVC online or by using the standard application form found on their website. Prudential will continue to support members on the phone once they’ve become a member of the AVC arrangement. The contact number for the AVC member support team is 0345 6000 343.
Changes to AVC plan taken out before 1 April 2014
If you started paying AVCs before 1 April 2014, the rules around your plan were slightly different to those taken out after 1 April 2014. If you have not yet taken payment of your AVC plan, the below changes now apply to you following the introduction of the LGPS (Amendment) Regulations 2018.
- The maximum contribution limit has increased from 50% to 100% of pensionable pay.
- AVCs will now also be deducted from any voluntary overtime you work (if you pay AVCs as percentage of your salary).
- When you take your main scheme benefits you will no longer be able to leave your AVC plan invested and take it later.
- If you leave the scheme with a deferred benefit you can now buy additional pension from the LGPS with your AVC plan when you take your benefits from the scheme. Before the change, this option was only available to members who took immediate payment of their main scheme benefits and their AVC plan when they left the scheme.
- You can now nominate who will receive a death grant payment, should you die before taking your AVC plan.
- If you have more than one AVC plan, either through different jobs or a transfer of AVC benefits from elsewhere, these plans will be automatically joined together when your main benefits are combined. Previously you used to have to tell us to do this.
Please be aware that some of the old rules have stayed the same. Your normal pension age is still 65 (in most cases), and if you started your contract before 13 November 2001, you'll still have the right to buy scheme membership in some cases.
Payroll guide for AVCs
Do any of your employees pay Additional Voluntary Contributions? If so then it’s important for payments and payroll files to be sent to Prudential correctly, as it could mean:
- Prudential won’t invest contributions until the correct payroll file and payment is received. This also impacts other members contained in the payroll files, as they’ll be unable to claim or transfer their funds when they need them.
- It can cause tax payments and member benefit statements to be incorrect, if the contribution types on the payroll file are wrong.
Prudential have produced a handy payroll guide to help employers send information successfully each time.
We are aware many academies are going through conversions at the moment so please don’t forget to let Prudential know if any members with AVCs are impacted.
