As a contributing member you are able to increase your pension benefits if you wish to do so. There are two tax efficient ways that you can do this.
Additional Voluntary Contributions
Additional Voluntary Contributions (AVCs) allow you to invest money in the Stock Market, directly from your pay, through an AVC provider to provide additional retirement benefits. AVCs are arranged through your payroll; if you wish to purchase an AVC you will need to contact:
- Prudential (Free phone number 0800 434 6629) for both Funds
- Standard Life (0131 225 2552) (Northamptonshire Fund only)
Remember that the value of your fund can go down as well as up and you may not get back the amount invested.
Budget 2016 Update for Prudential - Prudential’s website has a section on the changes to tax and allowances which took effect from 6 April 2016 in regards to AVCs.
Additional Pension Contributions
Additional Pension Contributions (APCs) can be used to purchase a specific amount of extra pension benefits through the LGPS. You can purchase up to £6,675 (as at 1/4/2015) of additional pension that you would receive on top of the pension benefits you are already looking forward to as a member of the LGPS. We would then work how much it will cost you to purchase that amount of additional pension. An APC can be purchased either by paying a one off lump sum or by making extra contributions from your salary. You would then receive the amount you specified on top of your normal pension benefits every year for the rest of your life.
An APC can also be paid to buy back pension lost, for example where you have a period of authorised leave
A calculator is available to assist you in any decision and the ‘Buying Back Pension Lost Due to Absence’ Form is on our Forms and Resources page. This form will need completing and sending to your employer in order for them to complete the pensionable pay details, this pay figure will then be needed by yourself to input into the calculator. Print out the results. After submitting your application to your employer, your employer will need to check and authorise any employer monies. Your employer will confirm to you when payment(s) are to be made. A copy of both forms needs to be sent to the Pensions Service.
Except for APC contracts to recover lost pension, LGSS Pensions confirm that the Cambridgeshire and Northamptonshire Pension Funds will require a medical check for regular contribution AND lump sum APC contracts. For clarity, no medical check is required for APC contracts to recover lost pension.
Other ways to increase your pension benefits
In addition to AVCs and APCs there are two additional ways that you can increase your retirement benefits outside of the LGPS.
- Free standing Additional Voluntary Contributions (FSAVCs) to a scheme of your choice.
- Contributions into a personal pension plan or stakeholder pension.
Do you, or did you have a with-profits policy with Equitable Life?
The Equitable Life Payment Scheme was set up by the Government to make payments to Equitable Life policyholders who suffered a financial loss as a result of the Government maladministration in the regulation of Equitable Life.
Further to the launch in July 2011 payments have been made to eligible individual policyholders. The Scheme contacted those eligible for compensation in a Group Scheme, such as the Local Government Pension Scheme Additional Voluntary Contribution (AVC) arrangement that was available to members of the Cambridgeshire Pension Fund.
As announced by the Chancellor in the Summer Budget 2015, the Equitable Life Payment Scheme closed to new claims on 31 December 2015. It closed to all correspondence on 29 February 2016, except for complaints relating to payments received after 29 January. You can read more on the Equitable Life Payment Scheme website.