AVCs – purchase of additional pension

AVC contracts entered into on or after 1 April 2014

Guidance on the use of accumulated AVCs to provide additional pension under the Scheme where AVCs commenced on or after 1 April 2014. Administering authorities should use this guidance together with factor tables 806 and 807 when calculating the additional pension purchased from a post-2014 AVC plan.

In our view, administering authorities should also use this guidance and the same factor tables when calculating the additional pension purchased from a protected post-2014 AVC plan. Definitions of ‘post-2014 AVC plan’ and ‘protected post-2014 AVC plan’ are set out in the AVC technical guide. The definition in the guide then covers deemed cases from aggregation.

AVCs entered into before 1 April 2014

Guidance on the use of accumulated AVCs to provide additional pension under the Scheme where AVCs started before 1 April 2014. Administering authorities should use this guidance and factor tables 802 and 803 only for a pre-2014 AVC plan. They should not use this guidance or these factors for a protected post-2014 AVC plan.

A member with a pre-2014 AVC plan may use their AVCs to purchase additional LGPS pension only if they take immediate payment of their main scheme benefits when they leave the Scheme. As members in this category will have left the LGPS many years ago, we expect that this guidance and the associated factors will now be obsolete.

See the AVC technical guide for more information about pre-2014 and protected post-2014 AVC plans.