Additional regular contributions and additional voluntary contributions
Additional regular contributions to purchase additional pension
It is possible to purchase additional pension from the LGPS by agreeing to pay Additional Pension Contributions (APCs).
APCs are quite flexible in that it is up to you to choose how much additional pension that you want, how long you want to pay the contributions for and whether or not you want to provide additional dependant's pension.
Benefits of additional pension contributions for you
- you can elect to start a contract at anytime that suits you and the payment term will be a complete number of years
- you will receive tax-relief on any contributions you make to the scheme
- the contribution you choose to pay will remain the same, it will not increase as your salary increases. The Government Actuaries Department may determine that the rates need to change in the future, if so you will be required to pay the revised rates (you will of course have the option to cease paying)
- you may notify us at anytime that you want to cease payment, you will be credited with the pension that you had paid for when you stop on a pro-rata basis
- the pension that you choose will rise with inflation, the value will rise each April by the same percentage rate that all public and state pensions rise, the index used is the Retail Prices Index (RPI)
- the pension that you choose will be paid to you in full when you retire assuming that you have finished paying for them and have not elected to receive them earlier than age 65. Reductions will apply if payment is not completed or the pension is paid early
- if you are retired on health grounds under Tiers 1 or 2, any outstanding contributions are waived and you will receive full benefit of the pension you are purchasing. Southwark may ask you for a certificate of 'good health' before allowing you to make a purchase
- when you retire you will be able to commute the extra pension to receive tax-free cash (each £1 pension will commute to £12 cash)
Further information on additional pension contributions
The additional pension when in payment is guaranteed for ten years, if you die before we have paid out the pension for 10 years then the balance is paid as an additional death grant.
If you have left local government service but die before the pension starts then an additional death grant equal to five times the value of the additional pension will be paid.
If you die in service no additional pension will be paid, unless you have chosen an additional dependant's pension.
If you have chosen a dependant's pension it can only be paid to a dependant that is recognised by the LGPS 2013 to receive a survivor's pension. They must be a legal spouse, a civil partner, a nominated co-habiting partner, or an eligible child.
A partners pension is equivalent to 37.5% of the member's additional pension, a single eligible child would receive 18.75%, if there are more than one eligible child the total additional pension will be 37.5% divided equally between the total number of children.
The dependants' pensions are based on the original amount chosen, even if the member pension has been reduced by commutation to lump sum or reduced because of early payment.
It is also possible to pay additional voluntary contributions to the council's in-house provider, AEGON.
These contributions are limited to 50% of your salary (on a monthly basis), it is not possible to make contributions for prior months (even in the same financial year).
These contributions are invested in funds of your choice and can be used to purchase an annuity at retirement age, taken as part of the larger lump sum now allowed or to purchase additional service in the pension scheme.
Page last updated: 22 September 2017