A member and/or employer can make extra contributions towards a member’s pension. There are many ways this can be done.
Additional pension contributions (APCs)
Members have the option to buy extra pension of up to £7,194 per year (2020/2021 figure). If they've more than one LGPS employment, this is the maximum altogether. They can buy the extra pension as a one-off lump sum or pay monthly.
APCs don't include survivors' pensions in the event of death. These additional contributions must stop if the member joins the 50/50 section of the scheme.
You can find more information about the cost of APCs on the LGPS member website.
Shared cost additional pension contributions (SCAPCs)
As an employer, you can use SCAPCs to buy additional annual pension for an employee. If this is something you offer, this should be outlined in your discretions policy.
The employee must be a member of the LGPS, and the maximum you can buy is £7,194 (2020/2021 figure). The cost of the APC depends on the age and gender of the member. You'll have to buy the APC as a one-off lump sum.
You can buy APCs for a former member. Although, only if they left within six months because of redundancy or business efficiency.
You find out how much you'll have to pay by using the additional benefit calculator on the LGPS member website.
Please note: SCAPCs also cover members buying back lost pension for a period of absence. This is explained on the dealing with absences page. If a member's buying back lost pension, the application form must be submitted to you as the employer. However, if they're buying additional pension, the application form must be sent to us.
Additional voluntary contributions (AVCs)
Our current in-house provider of AVCs is Prudential. Some employees may also have AVCs with our previous provider, Utmost Life and Pensions Limited (previously known as Equitable Life).
If a member wishes to start an AVC with Prudential they must contact them directly. They can call them on 0800 028 1493 or visit their website.
Once they've set up the AVC, you'll be sent details including how much payroll need to deduct from their wages, the start date and how to make the payments.
Other additional contributions contracts
Some members may be buying extra pension under previous regulations. These include:
- Added years (buying additional membership)
- Additional regular contributions (ARCs)
- Additional survivor benefit contributions (ASBCs)
- Preston part-time buy-back
The above continue from 1 April 2014 under the same rules as before, and on the terms of the contract they were originally taken out. Added years and ASBC contracts will continue to be deducted as a percentage of the 2008 definition of pensionable pay.
If a member wishes to stop their added years or ARCs contract, you must give us their written request.