As a member, you can enhance your benefits by setting up an Additional Voluntary Contribution (AVC) arrangement.
Gwynedd Pension Fund has an in-house scheme where you can invest money through the AVC provider, Clerical Medical.
Contributions are deducted from your allowances before tax, so they qualify for tax relief. You can pay up to 50% of your taxable earnings into the in-house AVC scheme for each employment where you contribute to the LGPS. There is no minimum amount you must pay each month. Contact us if you would like a quotation.
The money will be invested separately from your main contributions, in a fund of your choice with Clerical Medical. You will have your own personal account containing your contributions and any investment returns. No value can be released from the fund until you take your main scheme benefits.
When you retire, there are several options for taking the benefits from the AVC fund. Full information will be provided to enable you to make an informed decision.
See the Appendices section below for an application form and Clerical Medical information booklet.
The retirement options currently available are:
- Take an annuity from Clerical Medical with a 25% tax-free lump sum, or without it.
- Take an annuity from another provider – the open market option (any tax-free lump sum would depend on the new provider’s policy).
- Take a tax-free lump sum of up to 100% of your AVC fund, if the permitted limits have not been exceeded. This figure will change as your salary and fund increase.
- Defer your AVC pension until any time before you reach age 75.
Important points to note:
- No medical examination is required before starting contributions to the AVC fund.
- Payments start from the next available payroll date after your choice is accepted.
- You can vary or stop payments at any time while contributing to the LGPS by making a written request to Gwynedd Pension Fund.
- You can change your investment choice at any time by making a written request to Gwynedd Pension Fund.
- If you die in service, the full value of the fund will be paid to your dependants / nominated person(s).
- If you leave local government employment and transfer your LGPS benefits to another scheme that is not LGPS, you can usually transfer your AVC fund as well. You should ask your new pension provider for details.
- If you take your deferred AVC benefits at the same time as your deferred main scheme benefits, you will still have the option, within the set limits, to take up to 100% of the AVC fund as a tax-free lump sum.
- If you decide to defer your AVC benefits until any time before age 75 after taking your main pension benefits, then when you are ready to take your AVC benefits, only the options in parts 1 and 2 above will be available to you, with a 25% tax-free lump sum, or without it.