Pensions Line Special June 2014

Pensions Line Special

Additional Pension Contributions (APCs)

With effect from April 2014 the new Local Government Pensions Scheme has introduced Additional Pension Contributions (APCs) which allow members to: 
1. Purchase additional pension
2. Buy back ‘lost’ pension for authorised absences  
We have created two new factsheets for members which can be found in the active members section on our website: 
1. Buying additional pension via Additional Pension Contributions (APC) and Additional Voluntary Contributions (AVC)
2. ABSENCES – Buying lost pension by paying Additional Pension Contributions (APC) 

We have also created two employers guides which can be found in the employers section on our website: 
2. ADDITIONAL PENSION CONTRIBUTIONS (APC) - Buying lost pension during periods of absence 
It is essential that all employers read the two employer guides to familiarise themselves with the new procedures (particularly the employers guide 2. Absences.) In the documents section there is also a form for the employer to complete to tell Peninsula Pensions when an employee takes out an APC to purchase lost pension. 

Please note APCs to purchase additional pension (1 above) replace the old method of purchasing additional pension in the LGPS (ARCs).

In LGPS 2014, APCs to buy lost pension (2 above) replace the old method of paying missing pensions contributions for authorised periods of absence. Any absence before 1st April 2014 is still dealt with by paying the missing contributions, but absences after 1st April 2014 are dealt with using the new APC method. Where the absence spans 1st April, a split calculation is needed.

get in touch

Peninsula Pensions website also includes a link to the APC calculator for employees and employers to use. Please note the link on the website is in the factsheets.
In cases where the employer wishes to use some of an employee’s redundancy compensation monies as an APC (in accordance with their discretions policy), please contact Peninsula Pensions for details of how much pension the compensation will buy as  there will a reduction to the pension payable due to its early payment.

Any questions or problems please contact: 
For absences - Mrs Viv Ray (Pensions Project Manager), Peninsula Pensions, 01392 383000 
For Purchasing Additional Pension - Mrs Annette Wass (Additional Benefits Team Manager, Peninsula Pensions, 01392 383000

Discretionary policies

Please note that employers have the discretion to pay for or contribute towards a member’s AVC arrangement under a shared cost AVC. This discretion was originally not in the example template but does need to be in your policy, so please ensure you include it. A revised example of the template will be on our website shortly. The policy is shown below: 
The employer should decide “whether, how much, and in what circumstances to contribute to a shared-cost Additional Voluntary Contribution (SCAVC) arrangement entered into on or after 1 April 2014 [regulation 17 of the LGPS Regulations 2013] and whether, how much, and in what circumstances to continue to contribute to any shared cost Additional Voluntary Contribution (SCAVC) arrangement that the employer had entered into before 1 April 2014 [regulation 15(1)(d) of the LGPS (Transitional Provisions, Savings and Amendment) Regulations 2014, regulation 25(3) of the LGPS (Administration) Regulations 2008 and regulation 15(3) of the LGPS (Benefits, Membership and Contributions) Regulations 2007]”  

Tip: Scheme employers should, prior to 1 April 2014, already have prepared and published a policy on SCAVCs under the 2008 Scheme (in accordance with the LGPS (Administration) Regulations 2008). Employers may, therefore, wish simply to carry forward their existing policy, but suitably amended to reflect both of the elements referred to above.