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Can I increase my benefits?

There are a number of ways in which you can increase your benefits.

 Additional Pension Contributions

You can choose to buy additional pension up to a maximum of £7,316 by taking out an Additional Pension Contribution (APC). You can calculate the cost of buying additional pension by using the calculator on the LGPS 2014 website, which can be accessed here .  You can choose the number of years over which you wish to buy the additional pension and can choose to pay either by regular contributions or one-off contribution .  If you opt to pay by regular contributions from your pay the minimum payment period is one year, if you are within one year of your State Pension Date then you have to make a lump sum payment.  Lump sum payments can be made from your salary or direct to the RCT Pension Fund - if you pay direct you will need to re-claim the tax relief on the contribution through the self assessment process.  Please read the information and terms and conditions that are produced as part of the quote carefully. 

If you are in the 50/50 section of the scheme you can not buy additional pension however you can buy back lost pension.

You can only buy additional pension benefits for yourself - no dependants pension will be payable on any Additional Pension Contributions made.

The extra pension that you buy will be added to your pension account in equal instalments over the number of years over which you decide to  buy the additional pension.  If you pay by lump sum the whole amount of pension will be added.

Before going ahead please bear in mind that making Additional Pension Contributions could impact your Annual Allowance and Lifetime Allowance and lead to you being liable for excess tax charges - if you have any questions about this please contact the RCT Pension Fund Helpdesk.

The calculator will provide you with a quote and an application form, you need to send a copy of the application form to  your employer  who should pass it on to the  the RCT Pension Fund.  If the application is accepted your employer will start the deductions from the next available pay period

The Pension Fund may ask you to have a medical examination and get a medical report from a registered medical practitioner (if you are asked to do this you will have to pay any charges) and may refuse the application to pay an APC.

 Additional Voluntary Contribution (AVC)

Our in-house pension providers are Prudential.  If you start paying AVC's after 1st April 2014 then you can pay a maximum of 100% of your salary, after statutory deductions for tax and National Insurance.  You decide how much you want to pay (either a percentage or fixed amount) , let Prudential know and they will let your employer know to start making deductions from your salary.  You get tax relief on AVC's, just like your regular contributions, so every gross contribution of £100 will only cost a basic rate tax payer £80 or £60 if you are a higher rate tax payer.

Regulations changed in May 2018 to allow members who started paying AVC’s before 1st April 2014 to also pay 100% of their salary as AVC’s.  Prior to May 2018 the limit was 50% of salary.

As these contributions are paid to Prudential you will have a policy in your name and you will have the choice as to where you want these contributions to be invested. 

You can view the Prudential LGPS website here {Prudential}. Here you can work out how much you can afford to pay and how much it will cost you, there is also information on the different fund choices available.

When you retire you can take some or all your AVC fund as a tax-free cash lump sum (subject to HMRC limits).

 AVC Exit Penalties

 With effect from 03 December 2018

 Prudential have discontinued exit charges in all instances.  Prior to this date a 1% exit charge was charged to members who accessed their AVC within 3 years of their first contribution being received.

 Other Options

 It is possible to pay into other pension schemes outside of the LGPS such as, personal pensions or stakeholder pensions.  The benefits of these types of scheme depends on the amount that is paid in and the investment returns.  It is unlikely that your employer would contribute and you are open to the investment risks of the funds.    

The RCT Pension Fund is not registered to give financial advice and can provide factual information only. You may wish to consider getting independent financial advice before making a decision - Click here.