If you choose to pay In-house Additional Voluntary Contributions (AVCs) under the LGPS, the AVCs are invested separately in funds managed by the AVC provider.
You have your own personal account that builds up over time. Your contributions and the returns on your investment are available when you retire. You can usually choose which investment route you prefer. You decide how much you can afford to pay.
What you can pay
If you are a new applicant after 1 April 2014, you can pay up to 100% of your pensionable pay, after deductions for your LGPS pension contributions, into an in-house AVC in each job where you pay into the LGPS. From 14 May 2018, the 100% of pensionable pay includes overtime payments.
If you were a new applicant before 1 April 2014, you could pay up to 50% of your pensionable pay, after deductions for your LGPS pension contributions. This changed from 14 May 2018 to 100% of pensionable pay including overtime payments.
How AVCs are deducted
AVCs are deducted from your pay, just like your normal contributions. Your LGPS and AVC contributions are deducted before your tax is worked out. If you pay tax, you receive tax relief (normally at your highest rate) automatically through the payroll. You qualify for tax relief on all pension contributions up to 100% of your pensionable pay, including your normal contributions.
Deductions start from the next available pay day after your election has been accepted. You may vary or cease payment at any time whilst you are paying into the LGPS.
Moving to another employer in the LGPS in Kent
If you are paying AVCs and change your job to an employer that still offers membership to the LGPS in Kent, your AVC contract may not automatically transfer. Your contract may stop. You should check your payslip. If it stops, you should contact your AVC provider to start a new contract.
Transferring out your LGPS pension
If you transfer your LGPS pension benefits to another pension arrangement, your AVC pot must also transfer.
Transferring in AVCs
If you have paid AVCs to a different scheme, you can transfer these to the LGPS to purchase extra pension. An election to do so must be made within 12 months of joining the LGPS, unless your employer allows you longer. This is an employer discretion; you can ask your employer what their policy is on this matter.