OSPS Additional Voluntary Contributions

Can I pay AVCs to increase my benefit?

You can pay AVCs on top of your normal contributions to OSPS in order to increase your benefits. AVCs have the same tax advantages as your normal pension contributions.

What are my options?

There are various options available to you. You can buy additional years of OSPS pensionable service, therefore increasing your OSPS retirement benefits;pay AVCs to the money purchase facility provided by the Prudential;pay free-standing additional voluntary contributions (FSAVCs) to a provider of your choice.

How can I pay?

Additional Years

Monthly: You can enter into an Added Years Contract, which can start at any time during active membership and run until at least your 60th birthday, or any time after this date, but not after your normal retirement date. The initial monthly amount is agreed with you and is a percentage of your salary and will therefore rise in line with any salary increases. If you were to leave, or wished to cease contributions to the AVC contract before the proposed end date, you would be awarded a pro-rata amount of service. If you wish to cancel your contract you are required to give 28 days notice.

Lump Sum: You can also pay a lump sum amount, which will purchase Added Years. This is a one-off payment, which can be paid any time during the year, but normally towards the end of the tax year in order to maximise the amount of the lump sum. You cannot pay a lump sum to purchase additional years after age 65.

Prudential Money Purchase AVC (MPAVC)

Monthly: You can pay AVCs to the Prudential at any time during active membership, even beyond normal retirement date. The initial monthly amount is agreed with you and can either be a percentage of your salary, which will go up in line with salary increases, or a fixed amount.

Lump Sum: You can also pay a lump sum amount. This is a one-off payment, which can be paid any time during the year, but normally towards the end of the tax year in order to maximise the amount of the lump sum.

How much can I pay?

The most you can pay, including your normal contributions, is 100% of your earnings, within the annual allowance, in any tax year.

Can I use my AVCs to increase tax-free cash?

Subject to certain restrictions, you may be able to take your AVCs as tax-free cash at retirement. Please contact the Pensions Office for more details.

What is a stakeholder pension?

A Stakeholder pension scheme is a money purchase pension arrangement. Your employer may provide access to this type of scheme or you can make your own arrangements with a provider of your choice.

Can I join a Stakeholder if I am already a member of OSPS?

You can have concurrent membership of both OSPS and a stakeholder. For further details of this facility, please contact the Personnel Office of your employer who should be able to give you details of their Stakeholder provider.

You may find the following Financial Services Authority (FSA) website helpful.