What are AVCs?
AVCs are a defined contribution type of pension arrangement used to build up additional pension benefits. The value at retirement will depend on the length of time the AVCs were invested and investment growth. Your Employing Company makes no contribution towards your AVC fund.
Should I pay AVCs?
The SCPF already provides you with a pension based on your Pensionable Service and Final Pensionable Salary. However, if you would like to save more for retirement and boost your SCPF pension, you can pay AVCs if you wish.
AVCs are tax efficient in the same way as the SCPF, in so far as you receive tax relief at the highest rate of tax you pay on the contributions you make. The decision to pay AVCs is yours, and you are recommended to take independent financial advice to help you decide. The maximum value of pension benefits that you can build up in a year without incurring a tax charge is restricted by the Annual Allowance.
How much can I pay?
You can make monthly AVCs of up to 75% of your gross monthly pay. You can also choose to make one-off AVC payments e.g. if you receive a bonus. Your contributions are deducted from your pay before tax is calculated.
How do I start paying AVCs?
The Pensions Advisory Unit can give you all the information you need to get started, together with a Contribution Instruction Form and an Investment Decision form. You can also request a quotation based on the contributions you would like to pay, showing what additional benefits you could possibly receive when you retire. However, you should note that the Pensions Advisory Unit can not provide you with financial advice.
Can I change or stop the amount of AVCs I am paying?
AVCs are flexible. You can decide to pay more or less or stop your AVCs at any time by completing a new Contribution Instruction Form. The Contribution Instruction Forms need to be sent to the Pension Advisory Unit by the beginning of the month that your change in contributions will be made e.g. for deductions to be made from your October pay, the Pension Advisory Unit must receive your Contribution Instruction Form by 1 October.
How soon can I start AVCs?
You can start paying AVCs at any time. The Pension Advisory Unit needs to receive your completed Contribution Instruction Form and Investment Decision form at the beginning of the month from which deductions from your pay will be made.
Can I pay AVCs if I have left Shell?
No, you can only pay AVCs whilst you are an active member of the SCPF. However, you can continue to select from the range of investment choices offered, until you draw your benefits, using Legal & General’s online facility Manage Your Account.