There are two ways to increase your pension benefits and save extra towards retirement.
Additional Pension Contributions (APCs)
If you are in the main section of the pension scheme you can pay additional pension contributions to buy extra pension.
You can choose to pay regular monthly contributions over a number of complete years or make a lump sum payment. If you pay monthly, the APCs are deducted from your pay before tax.
A lump sum payment can be made through your pay or directly to the North Yorkshire Pension Fund (NYPF). If you make payment direct to the NYPF you would need to arrange tax relief with HMRC.
When you take your main LGPS pension this will include the extra pension that you have paid for. If you take your pension before Normal Pension Age, the extra pension you have bought will be reduced for early payment. Your pension will be increased if you take it after your Normal Pension Age.
Please use the LGPS Member online calculator to calculate the cost. If you wish to start paying APCs complete the application form and return it to the Pension Fund. Additional information on APCs can be found on the LGPS Member website.
Before you can purchase APCs you are required to have a medical examination. You should make an appointment for a medical with your GP and ask them to complete the medical examination certificate that the Fund will provide, there may be a charge for this service. The APC contract will only start once the NYPF has received the completed medical questionnaire and your signed election form.
Additional Voluntary Contributions (AVCs)
As a member of the North Yorkshire Pension Fund (NYPF) you can pay AVCS through the Prudential, our in-house AVC provider. Paying in-house AVCs builds up a pot of money to provide additional benefits at retirement. You have your own account and can decide how the money is invested. At retirement you can take some or all of your AVC as tax free cash (up to HMRC limits) or use it to buy extra pension. Please see the AVC Guide and the LGPS Member website for more information.
You can pay AVCs if you are in the main section or the 50/50 section.
AVCs are deducted from your pay before tax, therefore if you are a tax payer you receive tax relief automatically.
For example:
If you pay tax at 20%, £100 of extra saving only costs you £80
If you pay tax at 40%, £100 of extra saving only costs you £60
The amount the value of your pension can increase each year without incurring a tax charge is set by HMRC and is known as the annual allowance (AA). The AA is currently set at £60,000.
Most people will be able to pay AVCs without exceeding the AA limit but if you are considering paying a large amount in AVCs in any year you should check on how the AA applies to you by contacting the NYPF.
For further information, including new AVC applications, please visit the Local Government AVC website. Once you are registered for an AVC arrangement, telephone support is available from the Prudential on 0345 6000 343.