AVCs are a flexible way to build additional retirement savings alongside your LGPS benefits. Contributions are deducted directly from your salary and invested through Gwynedd Pension Fund's AVC provider, Legal & General (L&G). As contributions are deducted from your pay before tax is applied, you benefit from tax relief on the amount invested.
Investment Options
The default investment option is the Legal & General Target Date Fund range. Unless you choose an alternative option, your contributions will be invested in the Target Date Fund that is closest to your expected retirement date.
These funds are designed to automatically reduce the level of investment risk as you approach retirement.
Once your AVC account has been established, you can:
- View and monitor your account online.
- Review all available investment funds.
- Change your investments at any time.
- Change your Target Retirement Age.
- Review your investment choices as your circumstances change.
As with any investment, the value of your AVC fund can rise or fall, and the benefits available at retirement will depend on the value of your fund.
Your AVC Fund at Retirement
At retirement, the options available in respect of your AVC fund, based on current regulations, are:
- Take your AVC fund as part of your tax-free retirement lump sum, provided that when added to any lump sum taken from your main LGPS benefits, the total tax-free lump sum does not exceed the lesser of £268,275 or 25% of the capital value of the LGPS benefits being taken at that time, including the value of your AVC fund.
- Purchase additional pension within the LGPS.
- Purchase a regular income (annuity) payable for the rest of your life from Legal & General or another provider.
Managing Your AVC Account
It is important that you provide a personal email address when completing the application form. Legal & General will use this address to provide access to their online Member Portal, where you can view your account, monitor your investments and make changes to your investment choices.
Members who do not have internet access can manage their AVC account by contacting Legal & General by telephone.
How to Get Started
If you would like to start paying AVCs:
- Read the AVC application form and accompanying guidance notes carefully before completing the application.
- Decide how much you would like to contribute each month.
- Complete the application form, including your personal email address.
- Return the completed form to your employer's Payroll Department, which will arrange for the deductions to be made from your salary.
Once your employer has processed the application, the AVC contributions will begin to be deducted through payroll.
Important Information
Neither Gwynedd Pension Fund nor your employer is authorised to provide financial advice. If you are unsure whether AVCs are suitable for your circumstances, you should consider seeking independent financial advice.
Completed AVC application forms must be returned to your employer's Payroll Department and not to Gwynedd Pension Fund. Your employer will arrange the deductions and notify the Pension Fund and Legal & General accordingly.