AVCs
You can choose to increase your benefits from the NGE Group of the ESPS by paying Additional Voluntary Contributions (AVCs). AVCs are deducted from your pay and automatically get tax relief, just like your normal pension contributions.
AVCs are used to:
- buy added years of contributing service
- pay contributions to money purchase arrangements.
You can make AVCs on a regular basis or as a one-off payment, but there is a limit on the total amount that you are able to contribute to the NGE Group of 15% of your total earnings (including any non-pensionable elements).
If you participate in Flexible Pension Savings (FPS), the 15% limit of total contributions payable includes the standard contributions paid on your behalf by the employer under FPS. The total amount you are able to contribute to the NGE Group is not affected by participating in FPS.
Limits on how much you can pay
There are limits on the amount of benefits you can build up in a defined benefit arrangement or pay into a defined contribution arrangement (including Scheme AVCs) in a tax-efficient manner.
Added years
The cost of added years AVCs depends on your age and your pensionable salary – please contact Railpen for a quotation.
Money purchase AVCs
Members can pay money purchase AVCs via Legal & General. You pay contributions into your chosen fund(s) and at retirement, the value of the fund is used to either enhance your lump sum payable from the Group to the permitted limit, or can be used to 'buy' extra pension by way of an annuity, which you can purchase from the AVC provider or from an alternative insurance company.
If you would like to pay money purchase AVCs, please contact Railpen or use the Money purchase AVC form available in the library below.
The Investment Options guide is available here and contains useful information on the basics of investing and the investment options that are available. There are also some online tools to help you identify your attitude to investment risk and plan for your retirement.
You can use L&G's online portal: 'Manage Your Account', to make changes see how your AVCs are currently invested. L&G operates a helpline if you have questions about the investment options available through your plan.
The Group’s AVC arrangement with Legal & General is subject to an annual management charge of 0.36% and a fund management charge, which varies from fund to fund and is shown in the Legal & General investment guide. The annual management charge represents the cost of Legal & General administering your policy and Legal & General take this by cancelling units each month. The fund management charge consists of the investment management charges plus additional expenses for each fund. It includes investment management fees, fund administration fees, custody/custodian fees, auditing and accounting fees as well as regulatory charges and is reflected in the unit price of each fund.
For more information about paying money purchase AVCs or making changes to your current contributions or fund choices, please contact Railpen.
For members who started paying AVCs before 1 April 2010 with Aviva, the following funds are available:
Aviva Deposit Fund
Aviva Global Equity Fund
Aviva International Index Tracking Fund
Aviva Long Gilt Fund
Aviva Mixed Investments 40-85% Shares Fund
Aviva UK Equity Fund
Aviva UK Index Tracking Fund
Aviva With-Profit Fund
Aviva With-Profit Guaranteed Fund
For more information about paying money purchase AVCs or making changes to your current contributions or fund choices, please contact Railpen
Prudential investment funds include:
Global Equity
Discretionary
Long-Term Gilt Passive (formerly called 'Retirement Protection')
Cash
The following funds make up the Lifestyle investment option:
BlackRock UK Equity Index
International Equity
Index-Linked
From 1 October 2017, the following funds are only available if you were already contributing to them:
UK Equity
UK Equity Passive Fund
Deposit Fund
Dynamic Growth IV Fund*
* This fund is held as a component of the lifestyle strategy; if you are invested in this fund, you were previously invested in the ‘International Equity’ and ‘UK Equity Passive’ funds.
For more information about paying money purchase AVCs or making changes to your current contributions or fund choices, please contact Railpen
Savings with Utmost are invested in the ‘Investing by Age’ strategy which is made up of the following funds: Multi-Asset Moderate, Multi-Asset Cautious, Money Market.