Additional contributions

Members can gain extra benefits on top of their LGPS member benefits by paying additional contributions: 

• Additional Pension Contributions (APCs) to buy extra or lost pension, arranged through Avon Pension Fund.
• Additional Voluntary Contributions (AVCs), arranged through the Fund AVC provider, Legal & General.

Additional pension contributions (APCs) 

What are APCs? 

Employees in the Scheme can buy extra annual pension up to £8,344 (as of 1 April 2024), through an APC contract. Employers can choose to help cover the cost of buying extra pension. Employees can buy additional pension with or without employer contributions.

How employees can use APCs:

1. To buy extra pension. By making a one-off or regular additional contribution, to buy a set amount of additional pension. 

The cost is determined by the employee’s age and the amount they wish to purchase. 

Employees in the 50/50 scheme can’t start an APC in this circumstance.  

2. To buy ‘lost’ pension for authorised unpaid leave of absence - including any period of unpaid additional maternity, shared parental or adoption leave. 

The employer will generally pay 2/3 of the cost of the APC where: 

• The employee chooses to buy the APC to purchase pension ‘lost’ during a period of absence, and 
• Makes the election within 30 days of returning to work.

When the employer shares the cost with the employee, this is known as a ‘shared cost APC’.

The employer is only required to contribute for an absence of up to 36 months. An employee can commence an APC or shared cost APC in this circumstance even if they are in the 50/50 section. 

3. To buy pension ‘lost’ due to industrial action. An employee can commence an APC in this circumstance even if they are in the 50/50 section. 

The payment date for additional pension purchased by way of an APC, is the member’s Normal Pension Age. 

Your employees can find out more about APCs and AVCs on our member website  

Important points about APCs

• Where a regular contract isn’t practical, Avon Pension Fund may only accept a lump sum payment. 
• Avon Pension Fund can also require a medical report before approving an APC. Your employee would need to get the medical examination and report done by a registered medical practitioner, at their own expense. We can deny an APC contract application if we are not satisfied that the member is in reasonably good health. 

Shared Cost and Employer only APCs

Employers can cover some or all of the costs of an APC, this is known as a Shared Cost APC (SCAPC). If a scheme member elects to purchase an APC due to ‘lost pension’ within 30-days of returning to work the employer must pay 2/3 of the cost. This is only required for any individual period of absence up to 36 months. 

Employers can award additional annual pension to active members up to the current maximum (less any amount of additional annual pension the employer has already contributed towards or is contributing towards under a shared cost APC) using an APC contract. The maximum limit is £8,344 (as of 1 April 2024). 

An employer can do this within six months of an employee leaving, where the employee left on the grounds of redundancy or business efficiency. 

The employer would make a one-off contribution to buy the employee a set amount of additional pension. The cost is determined by the employee’s age and the amount purchased. 

In-house Additional Voluntary Contributions (AVCs) 

What are AVCs?

Employees can make Additional Voluntary Contributions (AVCs) to boost their pension. 

An employee electing for 50/50 can continue to pay into or take out an AVC arrangement or a shared cost AVC arrangement. 

AVC Contracts 

Employees can contribute up to 100% of their pensionable pay for AVCs, after accounting for mandatory deductions (like LGPS and National Insurance contributions). As these are employee contributions, they must be paid over to the AVC provider by the 22nd of the month after they were paid (or 19th if they were not paid electronically). Failure to pay contributions on time should be recorded and possibly reported to The Pension Regulator.