Additional Voluntary Contributions (AVCs) are a way of saving money towards your pension pot. Once started, any fund value cannot be released until you take your main scheme benefits.
All local government pension funds have an in-house AVC scheme. Contributions are deducted from your salary before tax, so they therefore attract tax relief at your tax rate (e.g. 20% or 40%). The money deducted is invested in the fund of your choice with Gwynedd’s AVC provider, Clerical Medical.
You can pay up to 100% of your pay towards an AVC, after allowing for any tax and National Insurance liability or any other existing deductions you may have.
There is no lower limit as to what you can pay each month.
As with all types of investments, the funds can go down as well as up. When you retire, there are several options available with regard to taking the benefits from the Additional Voluntary Contributions fund. You will be given full details to enable you to make an informed choice. The retirement options currently available are:
- To take an annuity from Clerical Medical with or without a 25% tax-free lump sum.
- To take an annuity from another provider- the open market option (any tax-free lump sum would depend on the new provider’s policy).
- To take a tax-free lump sum up to 100% of your Additional Voluntary Contributions fund, if the limits allowed are not exceeded. This figure will change as your salary and fund rises.
- To take a tax-free lump sum up to 100% of your Additional Voluntary Contributions fund, if the limits allowed are not exceeded. This figure will change as your salary and fund rises.
- To defer your AVC pension up to any time before age 75.
How do I join?
Please complete the Clerical Medical Application form and return it to the Gwynedd Pension Fund. The form can be found in the 'Attachments' section below.
You will need to decide how much contribution you would like to pay each month and where to invest your money. Information on the investment funds available can also be found in the 'Attachments' section below.
Some important things to note
You can vary or cease payments at any time whilst you are contributing to the LGPS.
If you leave local government employment and transfer your LGPS benefits to another non-LGPS scheme you can normally also transfer your AVC fund. You should ask your new employer for details.
If you transfer your main scheme LGPS benefits to another LGPS employer, you can choose to transfer your AVC fund, or leave it frozen in that fund. If you do this, it is your responsibility to notify your previous employer of any future change in your circumstances.
There is no need for a medical examination before starting to contribute to the AVC fund.
You can change your investment choice at any time by a written request to the Pension section.
If you die in service, the full fund value will be paid to your dependants / nominated person(s).
If you decide to defer your AVC benefits up to any age before age 75 after taking your main pension benefits, then when you are ready to take your AVC benefits, only the options in section 1 & 2 above, will be available to you, with or without a 25% tax free lump sum.
Attachments
Clerical Medical Application Form
Investment Booklet
Key Features
Funds Available