1. finance
2. personal finance
3. financial planning
4. retirement and pension

Ways in which
Scheme Members
can increase
benefits
CONTENTS
Ways in which Scheme Members
can increase benefits
Page 1
Purchase of additional service
Page 2
Scheme AVCs
Page 3
Shared Cost AVCs
Page 4
Action to be taken
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January 2005
Pensions Handbook
Part I
There is a provision in the scheme to enable members to pay additional
contributions in order to “purchase” rights to increased benefits from the
scheme. These provisions are as follows:1.
Purchase of Additional Service (added Years – Whole Cost)
A scheme member may purchase additional service, referred to hereafter as
“added years”, to increase the benefits payable upon retirement.
Purchase of added years at full cost to the member can only be made (subject
to certain conditions and one exception) by periodical additional contributions.
Full details are given below.
There are limitations to the maximum period that may be purchased, and no
scheme member may increase their potential total period of membership at
their normal retirement date beyond 40 years. The maximum additional period
is subject to restriction if the member is entitled to or has received pension
benefits under any former scheme.
Any additional period purchased will usually count in the calculation of both
pension and lump sum benefits in the same was as other service (i.e. 1/80th of
final pay for each year for the pension and 3/80ths for the lump sum), this
service being proportioned if the scheme member is employed on a part time
basis. If however the member was over the age of 45 at the commencing date
of the earliest period of membership, any added years count at the higher rate
of 1/60th for pension purposes, but there is no lump sum retiring allowance
payable in respect of those added years. The difference does not, however,
affect the rate of a spouse’s or children’s pension. It should be noted that any
added years purchased will count towards the length of membership used in
calculating the 85 year rule.
An election to purchase added years by periodical contributions can be made
at any time during a scheme member’s service, but no later than one year
before their normal retirement date.
The extra contributions are calculated as an additional percentage of
remuneration and are payable from the member’s birthday next following the
date of the election until the birthday coincident with or next preceding the
earliest age at which he/she can retire with unreduced benefits. Tables 1 and
2 (males) and 3 and 4 (females) in Appendix 1 at the back of this section show
the additional percentage payable from the next birthday to purchase one
additional year of service. You will see that there are different factors
dependant on whether the scheme member was in the scheme before 1 April
1998. Any scheme members who are unsure of the earliest age at which they
can retire should seek clarification.
It should be noted that if a scheme member intends to make an election but
delays application until a later time, the additional percentage of contributions
will be higher.
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Pensions Handbook
Part I
The total contribution rate for a scheme member must not exceed 15%
(including the basic contribution rate). Some scheme members also can make
a lump sum payment as well as the 15% contribution. Payment by additional
contributions qualifies for tax relief, but relief is not available for an excess
period lump sum payment.
If a scheme member retired prematurely on the grounds of ill health, or dies in
service, the additional period being purchased counts in full for calculation
purposes as if the contract has been completed. If they cease employment in
any other circumstances before the additional contributions have ceased, the
contract will end and a proportionate service credit will be calculated. Where
the scheme member has retired on redundancy or efficiency grounds, it is
possible for them to complete the contract by the payment of a lump sum. If,
however, the member has not qualified for benefits (normally by completing 3
months service) the contract will end and the additional contributions will be
returned. If the scheme member re-enters pensionable local government
employment within 12 months of leaving they can reinstate the contract by
paying the requisite contributions to bridge any break in service.
Payment of additional contributions may also cease if the scheme member
notifies the Administering Authority (KCC) in writing that they no longer wish to
pay the contribution – a proportionate service credit will then be calculated.
2.
Scheme Additional Voluntary Contributions
This is an arrangement whereby a scheme member can pay extra
contributions to provide an additional pension (no additional lump sum is
permitted) and/or increase the value of the death in service grant.
Scheme members can choose the amount they wish to contribute up to a
maximum of 15% taxable earnings each year, including the basic
contributions. The amount they choose to pay by way of Additional Voluntary
Contributions (AVCs can be varied from year to year or stopped and restarted
if wished). This arrangement is therefore more flexible than the purchase of
additional service under the pension regulations.
AVCs attract full tax relief and are invested in a special fund where they build
up without any liability for tax. At retirement age, the total of the fund is
normally used to purchase a pension to “top up” the pension from the Pension
Scheme but see the note following paragraph 3.
Kent County Council as Administering Authority now has two providers:Standard Life and Prudential
However some members who have previously made contributions to Equitable
Life have chosen to continue to do so. It is not possible for a scheme member
to now choose Equitable Life if they have not previously paid AVCs to them.
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Pensions Handbook
Part I
These providers give a wide range of investment opportunities and additional
life cover, which are described in publicity booklets, supplies of which are
available from the Pension Section. These booklets contain application forms
for the member to complete if interested.
3.
Shared Cost Additional Voluntary Contributions (SCAVCs)
An employer, if he wishes, may use his discretion to offer an SCAVC facility to
scheme members, (See Part L). Apart from the shared contributions an
SCAVC scheme would operate in exactly the same way as a normal AVC
arrangement. Policy decision required.
Points to note:
The employer contribution need not match the employee’s

The SCAVC must specify whether all or any of the contributions are to be
used to increase the value of death benefits

The employer’s contribution will not count towards the Inland Revenue
contributions limit of 15% thus there is scope for a faster growth of funds

The employer may well find it advantageous to use such a scheme to aid
recruitment in difficult areas

This scheme can be terminated by either party at any time. It is entirely at
the employers’ discretion as to the circumstances under which the SCAVC
scheme may be established. The only requirement is that the conditions
imposed by the employer are publicly known

In the event of any refund of contributions being made (i.e. arising from
over provision) all the reimbursed contributions will be payable (after
deduction of tax) to the scheme member.
If you wish to set up an SCAVC scheme facility contact the Pension Section
who will be able to advise you on the procedure which should be followed.
Note:If a scheme member started paying AVCs before 13 November 2001,
and ceased paying AVCs or SCAVCs or retires on the grounds of ill
health, the accumulated value of the fund can be used to acquire a
transfer credit in the scheme. The period of membership so credited
can only be used in the calculation of pension benefits, it does not
increase the lump sum payment.
In all other circumstances a scheme member must use their
accumulated fund to purchase an annuity which is a completely
separate payment and does not form part of their normal scheme
benefits.
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January 2005
4.
Pensions Handbook
Part I
Action to be taken

Purchase of Additional Service
If you receive an enquiry from a scheme member please refer them to the
Pension Section who will give them the information that they require. If
they decide to proceed you will be notified on Form Pen OB/AVCs of the
additional percentage to deduct from their pay.

AVCs or SCAVCs
When a completed application form is received, a copy should be sent to
the Pension Section to determine whether contributions can commence
having regard to Inland Revenue contribution and benefit limits.
NB. No contributions should be deducted from the scheme member’s
wages or salary until the form Pen OB/AVCs is received from the
Pension Section, except in the case of Prudential where you may
accept instructions to start or amend deductions, from them direct.
Notification and payment to AVC providers
Regulation 16 of the Occupational Pension Scheme (Scheme Administration)
Regulations 1996 requires that the contributions are sent directly to the AVC
provider within 19 calendar days of the start of the month following the month
in which they were deducted.
At the end of each financial year, details of the total contributions paid as
AVCs should be entered on form Super 4B, shown as a separate figure from
the normal pension contributions.
Equitable Life
We no longer offer Equitable Life to new AVC contributors although those who are
already paying may continue to do so if they wish.
For existing Equitable Life contributors you must ensure that the contributions are
sent directly to them within 19 calendar days of the start of the month following the
month in which they were deducted. Your payment should be accompanied by a
schedule of payees set out in strict alpha order or alternatively if you only have a few
contributors the specimen letter can be used.
Standard Life
There are two ways in which you can send the AVC contributions to Standard Life–
by BACS or by cheque. Whichever method you use, a contribution schedule must
be completed and sent to Standard Life each time a payment is made. You must
ensure that the contributions are sent directly to them within 19 calendar days of the
start of the month following the month in which they were deducted and that the total
on the contribution schedule reconciles with the total sum sent. The schedule can
be posted but it is preferred that it is e-mailed to service_gmp@standardlife.com. If
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January 2005
Pensions Handbook
Part I
a contribution schedule is not sent, the payment will not be able to be processed,
the members account will not be credited and any interest may need to be paid by
the employer. The contribution schedule must be e-mailed on the day the BACS
payment is made or attached to a cheque in cases where a cheque is being sent.
Any contributions received by Standard Life, where no contribution schedule is
received, will be returned to the employer after 10 days. A copy of the schedule and
instructions for setting up an e-mail version are set out at the end of this section.
Prudential
Prudential allocates AVC members to ‘Paypoints’; defined as groups of members for
whom an employer forwards contributions on a regular basis. It can be one
particular payroll or a group of payrolls as long as the list of members’ contributions
forwarded does not vary from period to period (allowing for any new joiners &
leavers).
The ‘Paypoint’ references that have been allocated to your payroll(s) must be
quoted on all correspondence.
Daily Interest & Timeliness of contributions
Member contribution schedules should be forwarded to Prudential ideally, as an emailed spreadsheet with a supporting BACS or cheque payment. Please be aware
that daily interest and bonus accrues in member’s accounts from the date of
payment receipt or member contribution schedule, whichever is the latter.
All Local Government AVC contributions must be received by the Prudential by the
19th of the month following the deduction from member salaries, as stipulated by the
Pension Act 1995. However in the light of the recent Merrill Lynch court case, it is
recommended that delays in forwarding contributions to Prudential be kept to an
absolute minimum.
Contacting Prudential
Prudential’s Local Government AVC e-mail Address
lgavc@prudential.co.uk
Local Government AVC Department PO Box
Local Government AVC correspondence can be forwarded to:
Local Government AVC Department
Prudential
PO Box 2711
Reading
RG1 3UL.
Customer Call Centre – 0845 6000343
to refer members with general enquiries on their AVC account.
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January 2005
Pensions Handbook
Part I
The Pension Connection – 0845 6070077
to refer members interested in paying AVCs or amending their current
contribution rate
Forwarding contribution information to Prudential
Prudential relies very heavily on contribution data being submitted in a standard
format and forwarded in a consistent manner. You are welcome to submit a direct
download from your own payroll system or populate a standard spreadsheet template.
Payroll File Format
The file must be in an Microsoft Excel, ASCII or Comma Delimited File format which
must consist of three elements - Header, Data Contents, Trailer. Below is an
example of how the file should look:
«Paypoint_Name» - «Sch_No»/«PP_No»/M06 – September 2004
Abbott
Bennett
Fredericks
1.
HA AA112233H
R
14.22
AA112233R
110.13
DEF AA112233D
230.12
Grant
N
AA112233N
43.76
Ingalls
ST AA112233S
150.00
Winter
B
Total
6
AA112233B
117.75
665.98
Header Record
This must be identifiable with your payroll and would ideally include your Prudential
‘Paypoint References’ and payroll period. If your submission method is to be e-mail,
this header record would be copied to the 'Subject header' of the covering e-mail.
2.
Data Contents
It is expected that there will be a member record for each contributing member and
one total record per file. Please submit separate files & payment if you have more
than one Prudential ‘paypoint’.
Field name
Surname/family
name
Initial(s)
National Insurance
Number
Amount for Period
Year To Date
Employee
Reference Number
New Starter
Leaver(s) Final
Contribution
-
Description
Upper and lower case letters.
Hyphens, apostrophes and
spaces allowed
Continuous alpha field with no
spaces or full stops
Continuous alphanumeric field
with no spaces or full stops
Number format with no ‘£' signs
Number format with no ‘£' signs
Your choice
Marker to highlight members
first contribution
Marker to highlight leavers final
contribution
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Example
Abbott
AB
Requirement
Mandatory
and sorted in
alpha order
Mandatory
AA112233B
Mandatory
150.00
353.25
987123456PE
Mandatory
Optional
Optional
New starter
Optional
Final
contribution
Optional
January 2005
3.
Pensions Handbook
Part I
Trailer Record - this will be the last line in the file
Field name
Description
Example
Total
Record Count
To highlight Total
The number of
contribution records
Total of all contribution
records to match payment
Total of members’ yearly
total
Total
533
Requiremen
t
Mandatory
Optional
31560.75
Mandatory
120438.42
Optional
Value
Year to date
total
Forwarding contribution information to Prudential
Member Contribution Schedule Spreadsheet Template
Please find below an example of our standard member contribution schedule
template, which is also acceptable for forwarding as an e-mail attachment or on
diskette. Please contact us should you wish to be forwarded a copy for your future
submissions.
Scheme Name
Paypoint Reference
Paypoint Name
Payment Period
Payment Frequency
Payment Method
* «Scheme» LGAVC Scheme
*
«Sch_No»/«PP
_No»
* «Paypoint_Name»
* M06 – Sept 2004
* Monthly/Four Weekly/Fortnightly/Weekly
* e.g. Cheque / BACS payment made dd/mm/yyyy
on Please complete
Please complete
Your contact name
Your contact telephone
no.
Your fax/e-mail address
Please complete
* Please amend as necessary *
Surname/Family Name
Initial(s)
N I Number
Abbott
Bennett
Charles
Davids
Fredericks
Grant
Ingalls
Klein
Smith
Winter
Total
HA
R
KC
O
DGF
N
ST
L
T
BGH
AA112233H
AA112233R
AA112233K
AA112233O
AA112233D
AA112233N
AA112233S
AA112233L
AA112233T
AA112233B
AVC for this
period
14.22
110.13
25.00
27.52
230.12
43.76
150.00
100.00
44.00
117.75
862.50
Please forward to:
lgavc@prudential.co.uk
or on a diskette to:
Prudential LGAVC Cash
PO Box 2711
Reading
RG1 3UL
Year To Date Comments e.g. New Starter,
(optional)
leaver final contribution, name
change
42.66
330.39
75.00
82.56
690.36
131.28
450.00
300.00
132.00
353.25
4951.10
Please ensure listings are sorted into alphabetical order, contains no zeros or negative amounts.
Only members of the Local Government Pension Scheme are to be detailed and AVCs will be invested as per
the members' investment instructions.
You may also wish to add further optional columns such as Employee Reference
Numbers, New Starter Indicator, Leaver’s Final Contribution Indicator.
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January 2005
Pensions Handbook
Part I
Important Note - should you also be responsible for Weekly, Fortnightly, FourWeekly or Multiple Paypoints, as provided in ‘Your Prudential Local Government
AVC References’, please ensure that the correct references & periods replace those
above.
Forwarding contribution information by e-mail
Prudential’s preferred method for the submission of contribution schedules is as an
e-mail attachment. Please find below examples of the standard wording to be
included in a covering e-mail text, depending on whether your organisation will make
payments to Prudential via BACS/CHAPS or by cheque. The text in bold should be
amended, where appropriate, with each submission.
BACS/CHAPS Payments
Subject: «Paypoint_Name» – «Sch_No»/«PP_No»/M06 – September 2004
Please find attached the Local Government AVC member contribution schedule in respect of
September 2004 for employees of «Paypoint_Name».
I confirm that a BACS payment amounting to £12,345.00 will be paid in to your bank account
on dd/mm/yyyy.
Should you have any queries please contact me on CONTACT TEL NO.
CONTACT NAME
Cheque Payments – a copy of the e-mail should then be printed and forwarded
with the cheque payment, saving you the need to prepare a covering letter.
Subject: «Paypoint_Name» – «Sch_No»/«PP_No»/M06 – September 2004
Please find attached the Local Government AVC member contribution schedule in
respect of September 2004 for employees of «Paypoint_Name».
I confirm that a cheque amounting to £12,345.00 will be forwarded with a printed copy of this
e-mail under separate cover.
Should you have any queries please contact me on CONTACT TEL NO.
CONTACT NAME
Prudential’s Local Government AVC e-mail Address
Prudential’s e-mail address for Local Government contributions is:
lgavc@prudential.co.uk
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Pensions Handbook
Part I
Forwarding Your First Data Submission to Prudential
Test Data Requirements
We recommend that you forward a test file(s) in the same format as we can expect
future schedules to be provided. However you may simply wish to use your first
‘live’ submission as the ‘test’. Once the data is compiled, please telephone us and
we will make preparations for receipt and approval.
Data Security
E-mail security
If you want to send member contribution data to Prudential via e-mail you are at
liberty so to do. Any risks are yours to take regarding whether you choose to
encrypt the mail in anyway.
However, even without encryption, there are things that can be done to provide an
acceptable level of security:


have receipt confirmed.
ensure that any file attachments are password protected, and that the password
is communicated to the recipient by telephone or in a separate e-mail.
Diskette security
We recommend that you password protect files saved on diskette and notify
Prudential of them in advance. Diskettes will be returned to you once processed. If
not password protected, the data will be deleted before return, unless you tell us
otherwise.
Forwarding contribution information on diskette
You may wish to submit member contribution schedules on a diskette rather than as
an e-mail attachment. Please ensure that your disks are labelled with the
appropriate Prudential References, amounts and periods, as illustrated below.
However we will supply you with pre-referenced labels to assist you.
Important Note - should you also be responsible for Weekly, Fortnightly, FourWeekly or Multiple Paypoints, as provided in ‘Your Prudential Local Government
AVC References’, please ensure that the correct references & periods replace those
below.
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January 2005
Pensions Handbook
Scheme:
Local Govt Pension Scheme AVC Facility
Paypoint Name: «Paypoint_Name»
Paypoint Reference: «Sch_No»/«PP_No»
please provide payment details below:
Payment Period: M06 – September 2004
Payment Amount: £12,345.00
BACS / CHAPS payment made dd/mm/yyyy
Cheque attached
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Part I
January 2005
Pensions Handbook
Part I
Making payments to Prudential
BACS payment details
Prudential’s preferred method of payment is BACS. Please find below our bank
account details for the payment of Local Government AVC contributions:
Bank Name:
Bank Address:
HSBC Bank plc
City of London Corporate Office
PO Box 125, 27-32 Poultry
London, EC2P 2BX
BACS Standard Record Layout
Field
No
1
2
3
4
5
6
7
8
9
10
11
Description of Field &
Content
Destination Sort Code
Destination Account No
Destination Type of
Account Code
Transaction Code
Originating Sort Code
Originating Account No
Free Format
Amount in pence
User’s Name (abbreviated
account name associated
with Fields 5 & 6)
User’s Reference
Destination
Name
Account
Information
400250
31029142
99
Your Sort Code
Your Account
Number
Not used
Value sent
Originator’s
identify
«Sch_No»/«PP
_No»/ followed
by the period
e.g. M012 for
March
PACCORPPMS
6000
Positio
n
1–6
7 - 14
15
Length/Justification
of Characters
6
8
1
16 – 17
18 – 23
24 – 31
2
6
8
32 – 35
36 – 46
47 – 64
4
11 Right justified
18 Left justified
65 – 82
18 Left justified
83 - 100
18 Left justified
Your Local Government AVC BACS Reference for Field 10
Your Prudential ‘Paypoint’ references allocated to your payroll(s) should be quoted
on all BACS payments in ‘Field 10’ as shown above for positions 65 to 82.
If you require assistance to process this change or are required provide a test file,
your BACS Bank Sponsor is your primary contact. Please send a copy of any BACS
test file(s) to our Technical Support Team at the address on the page ‘Contacting
Prudential’. However should you have any general queries, please feel free to contact
us.
Cheque payments
Please make any cheque payments payable to ‘Prudential’.
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January 2005
Pensions Handbook
Part I
CHAPS Standard Record Layout
Destination Sort Code
Destination Account No
Destination Account Name
User’s Reference
Amount in pence
400250
31029142
PACCORPPMS6000
«Sch_No»/«PP_No»/followed
period e.g. M012 for March
Value sent
by
the
Your Prudential references allocated to your payroll(s), should be quoted on all
CHAPS payments.
Commencing and Amending AVC deductions
How you will be notified
Once a member has completed their application form for a new or amended AVC,
they will confirm to Prudential the amount they wish to pay as either a percentage of
salary or a level monthly ‘flat-rate’ amount. Prudential will process the application, set
up a member account and issue written confirmation to the member.
Once a month, Prudential will issue a ‘New and Amended Members Contribution
Report’ to employers/payrolls. These reports are issued by the 25th of the month
before deductions are required. Reports are issued direct to the employer/payroll
providers stated on members’ applications, with copies provided to the Administering
Authority Pension Section.
It is the employer’s responsibility to process the instructions detailed on this report
onto their own payroll system as quickly as practical after receipt. If a third party
administers the payroll, it is the employer’s responsibility to forward the report to them.
Prudential should be contacted immediately should any of the Local Government
Pension Scheme members not be recognised from the reports.
Members interested in taking out AVCs or amending their current rate
Any members should be referred to The Pension Connection on 0845 6070077.
Please do not commence or amend any contributions without contacting Prudential.
Should you not be able to deduct percentage of salary contributions
If your payroll system does not permit you to take a percentage of salary deduction,
you should convert it to an equivalent flat rate contribution. You should then write to
the member to explain the situation, making them aware of the need to review their
contributions should their salary change.
Fluctuating emoluments
Members should apply for a percentage of basic salary contribution. As they are also
entitled to contribute a percentage of any fluctuating emolument (e.g. overtime,
commission) it is recommended that they do so as a single premium through payroll
near the financial year end. However they must ensure that they will have adequate
salary in the month(s) from which they wish the single premium to be deducted. They
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Pensions Handbook
Part I
should also be aware of the deadline for Prudential receiving the necessary
application form, to ensure that the instruction is included on the appropriate ‘New and
Amended Members’ Contribution Report’.
Personal Cheque Single Premiums - please be aware that only in ‘exceptional
circumstances’ will Prudential permit members to forward single premium personal
cheques to Prudential. AVCs should be deducted via payroll.
Changes to personal details - please ensure that Prudential is made aware of any
changes in member’s surnames, National Insurance Number etc.
Cancellation & Refunds
Members wishing to cancel AVCs
Should a member contact you directly to cancel their AVC, please ensure that the
member puts their request in writing and forwards to Prudential. In the meantime you
should ensure that deductions are ceased at the earliest available paydate.
Refunds through payroll and recovering contributions paid over in error
Should contributions ever require refunding to members, they should be made
through payroll. Any contributions already paid over to Prudential should be requested
in writing with suitable explanation. Negative adjustments to future member
contribution schedules submitted are not permitted without prior consent from
Prudential.
The Pensions Regulator and Regulatory Requirements
The Pension Regulator requirements
Under the terms of the Pensions Act, the Pensions Regulator have the power to
impose civil penalties of up to £5,000 for individuals or £50,000 for corporate bodies,
in the event of any act or omission on the part of an employer which adversely
affects the scheme, or contravenes legislative requirements. The courts may also
impose criminal sanctions. Magistrate Courts may impose fines of up to the statutory
maximum and Crown Courts may impose prison sentences of up to 2 years and/or
an unlimited fine.
Submitting contributions on time
Such penalties may be imposed for the failure, by an employer, to forward AVCs
within the time-scales laid down within the Pensions Act. The Pensions Act requires
that all employee’s contributions (including AVCs) must be received by the Provider
by the 19th of the month following the month in which the deductions were made,
(e.g. contributions deducted from the March payroll must be received by the AVC
Provider by the 19th of April).
The Administering Authority has an obligation to report all employers who fail to
meet these timescales. To enable the Administering Authority to meet this
obligation, Prudential will inform the Authority where we become aware of any
employer who fails to meet the above timescales.
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Pensions Handbook
Part I
Staying within Inland Revenue Rules
There are two main Inland Revenue requirements that need to be taken into account
when a member wishes to pay AVCs:
1) In any year, an individual’s total pension contributions – including all AVCs cannot exceed 15% of their taxable earnings from the employment being
pensioned.
2) Any member’s total projected pension benefits must not exceed the maximum
permitted after taking into account any retained benefits they may have from
previous periods of employment, from FSAVCs or from self-employment.
Prudential can assist the Administering Authority with ongoing monitoring by
providing details of members’ estimated fund values and projected pension benefits
at normal retirement date. Please note that all projected benefits are based on
assumed salary progression and fund investment growth, as set by our Regulator.
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Pensions Handbook
Part I
Specimen Equitable Life letter
HECM Customer Services
Equitable Life
PO Box 177
Walton Street
AYLESBURY
Bucks
HP21 7YH
Dear Sir
AVC Plan E0575
Contributions for the month of
Name of
Contributor
NI No
Amount
£
Total AVCs sent
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New
(please tick if
applicable)
January 2005
Pensions Handbook
Part I
H93213 - KENT COUNTY COUNCIL PENSION FUND
STANDARD LIFE DUE DATE - 01/MM/YYYY
Employers are reminded that they are required by legislation to have paid all
contributions to the trustees no later than the Pensions Regulator due date. Any
contributions not paid by this date should be reported to the Pensions Regulator and
may result in the employer being fined.
Surname Forename
Jones
Smith
Susan
David
Title
Mrs
Mr
Employer
Kent County Council
Kent County Council
Date of
Birth
NI Number
02/01/1979 ZZ258956Z
05/06/1989 JB597574B
-16-
Contract
No.
AVC
AVC
TV
AVC
Total
First Cont Last Cont
Single Contribution
Date
Date
£20.00 £50.00
£600.00
£70.00 01/11/2001
£600.00 01/11/2001
£0.00
£0.00
January 2005
Pensions Handbook
Part I
CONTRIBUTION BREAKDOWN BY E-MAIL
For schemes with a variable payment basis, Standard Life can receive the monthly
contribution breakdown in a file format sent by E-mail.
The contribution breakdown can be created using an Excel spreadsheet or similar
type package. This is then sent to us via E-mail. Once we receive this we use the
data on the file to automatically apply contributions to the scheme.
From April 2001, the top of the spreadsheet must contain the following information:
H00000 - SCHEME NAME
STANDARD LIFE DUE DATE - / /
.
Employers are reminded that they are required by legislation to have paid all contributions to the trustees no later than
The Pensions Regulator due date. Any contributions not paid by this date should be reported to the Pensions Regulator
and may result in the employer being fined.
The following table gives an example of the layout for the list:
Surname
Forename
NI Number
Anders
Brown
Caulfield
R
J
R
WL123456
YL234567
BT345678
Contract
No.
AVC
1
2
3
First Cont
Last Cont Date
Date *
*
23.21
14.15
45.69
* these fields can be used to advise us of New Entrants or Leavers.
Please also set up the following fields only if Single Premiums are a regular feature
of this scheme:
AVC Single
1000.00
Please do not separate data with a comma or spaces e.g. £1,000.00 should be input
as £1000.00 or
BB 45 67 89 B should be input as BB456789B
We currently use Excel 2000. Please let us know which version of Excel you use.
We also recommend that you password protect your spreadsheet. Please inform us
of the password by telephone or mail.
If using any other software package, we need to receive this file in a CSV (comma
delimited) format. If using an Apple MacIntosh, we would need to receive the file in
a PC format. Please call if you need more information on this.
Once we have processed the first list, our system stores the format of your file,
therefore please use the same format each month to send us the list. If you do wish
to change the format at any time, please let us know first.
Payment can be sent to us via BACS or Cheque
-17-
January 2005
Pensions Handbook
Part I
The E-mail address to use is:
gavc_contributions@standardlife.com
Access to this address is available only to authorised staff within our Group AVC
department.
-18-
January 2005
Pensions Handbook
Part I
Appendix 1
Table 1
Added Years – Males – (1/80th) Accrual
Additional contributions, of the percentage of pay, to be made by an active member who has elected
to make additional contributions to the scheme to increase his total membership
Members under 45 at commencement of earliest period of membership
Age on
next
birthday
after
election
Percentage for an increase in total membership of 1 year to be used by reference
To the normal retirement date below of a member who was a member immediately
before 1 April 1998
60
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
0.54
0.56
0.59
0.61
0.64
0.67
0.70
0.73
0.76
0.80
0.84
0.89
0.94
0.99
1.05
1.12
1.19
1.27
1.37
1.47
1.59
1.73
1.89
2.08
2.30
2.58
2.92
3.35
3.93
4.74
5.87
7.74
11.46
22.63
Over 60
and under
61
0.83
0.88
0.93
0.98
1.04
1.10
1.18
1.26
1.35
1.45
1.57
1.70
1.86
2.05
2.27
2.54
2.88
3.31
3.88
4.68
5.78
7.61
11.26
22.18
61 and
under 62
0.82
0.87
0.92
0.97
1.03
1.09
1.17
1.25
1.34
1.44
1.56
1.69
1.84
2.03
2.25
2.51
2.85
3.27
3.83
4.62
5.70
7.49
11.06
21.76
62 and
under 63
0.82
0.87
0.91
0.97
1.02
1.09
1.16
1.24
1.33
1.43
1.55
1.68
1.83
2.01
2.23
2.49
2.82
3.24
3.79
4.56
5.62
7.37
10.87
21.35
-19-
63 and
under 64
0.81
0.86
0.90
0.96
1.01
1.08
1.15
1.23
1.31
1.41
1.53
1.66
1.81
1.99
2.20
2.46
2.78
3.20
3.74
4.50
5.53
7.25
10.67
20.93
64 and
under 65
0.80
0.85
0.89
0.95
1.00
1.07
1.14
1.22
1.30
1.40
1.52
1.65
1.79
1.97
2.18
2.43
2.75
3.16
3.69
4.44
5.45
7.13
10.47
20.51
% for an increase in
total membership of
1 year to be used for
a member with NRD
of 65 who was not a
member immediately
before 01.04.98
65
0.81
0.85
0.90
0.96
1.01
1.08
1.15
1.23
1.32
1.42
1.53
1.66
1.81
1.99
2.20
2.45
2.77
3.17
3.71
4.46
5.47
7.15
10.51
20.58
0.46
0.48
0.50
0.52
0.54
0.56
0.58
0.60
0.63
0.66
0.69
0.72
0.76
0.79
0.83
0.88
0.93
0.98
1.04
1.10
1.17
1.25
1.34
1.44
1.55
1.68
1.82
1.99
2.19
2.42
2.66
2.95
3.31
3.80
4.47
5.48
7.16
10.52
20.60
January 2005
Pensions Handbook
Part I
Table 2
Added Years – Males – (1/60th) Accrual
Additional contributions, of the percentage of pay, to be made by an active member who has elected
to make additional contributions to the scheme to increase his total membership
Members over 45 at commencement of earliest period of membership
Age on
next
birthday
after
election
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
Percentage for an increase in total membership of 1 year to be
used
by reference to the normal retirement date below of a member
who was a member immediately before 1 April 1998
60
Over 60
and
under 61
1.74
1.89
2.06
2.27
2.51
2.81
3.19
3.67
4.30
5.19
6.41
8.44
12.49
24.63
1.71
1.86
2.03
2.23
2.47
2.77
3.14
3.61
4.23
5.11
6.30
8.28
12.24
24.08
61
and
under
62
1.56
1.69
1.84
2.00
2.20
2.44
2.73
3.09
3.55
4.16
5.02
6.18
8.11
11.97
23.51
62
and
under
63
1.43
1.54
1.67
1.81
1.98
2.17
2.40
2.69
3.04
3.50
4.09
4.93
6.06
7.94
11.70
22.95
63 and
under
64
64 and
under
65
65
1.32
1.41
1.52
1.64
1.79
1.95
2.14
2.37
2.64
2.99
3.44
4.02
4.84
5.94
7.77
11.42
22.38
1.22
1.30
1.39
1.50
1.62
1.76
1.92
2.11
2.33
2.60
2.94
3.38
3.95
4.75
5.82
7.60
11.15
21.81
1.15
1.23
1.31
1.40
1.51
1.63
1.77
1.93
2.12
2.34
2.61
2.95
3.38
3.96
4.76
5.82
7.60
11.16
21.83
-20-
Percentage for an
increase in total
membership of 1 year to
be used for a member
with NRD of 65 who was
not a member
immediately before 1
April 1998
1.27
1.36
1.45
1.56
1.68
1.81
1.97
2.15
2.37
2.62
2.87
3.17
3.56
4.07
4.79
5.85
7.63
11.19
21.86
January 2005
Pensions Handbook
Part I
Table 3
Added Years – Females – (1/80th) Accrual
Additional contributions, of the percentage of pay, to be made by an active member who has elected
to make additional contributions to the scheme to increase her total membership
Members under 45 at commencement of earliest period of membership
Age on
next
birthday
after
election
Percentage for an increase in total membership of 1 year to be used
by reference to the normal retirement date below of a member who was
a member immediately before 1 April 1998
60
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
0.56
0.58
0.61
0.63
0.66
0.69
0.72
0.76
0.79
0.83
0.87
0.92
0.97
1.03
1.09
1.16
1.23
1.31
1.41
1.52
1.64
1.78
1.94
2.14
2.37
2.65
3.00
3.45
4.04
4.87
6.02
7.92
11.71
23.07
Over 60
& under
61
0.86
0.91
0.96
1.01
1.07
1.14
1.22
1.30
1.39
1.50
1.62
1.76
1.92
2.11
2.34
2.62
2.96
3.40
3.99
4.81
5.93
7.80
11.51
22.64
61 and
under
62
0.86
0.91
0.96
1.01
1.07
1.14
1.21
1.29
1.38
1.49
1.61
1.75
1.91
2.10
2.32
2.60
2.94
3.37
3.95
4.76
5.86
7.69
11.32
22.22
62 and
under
63
0.85
0.90
0.95
1.00
1.06
1.13
1.21
1.29
1.38
1.49
1.61
1.74
1.90
2.09
2.31
2.58
2.92
3.34
3.92
4.71
5.79
7.57
11.13
21.81
63 and
under
64
0.85
0.90
0.95
1.00
1.06
1.13
1.20
1.28
1.37
1.48
1.60
1.73
1.89
2.07
2.29
2.56
2.89
3.31
3.88
4.66
5.71
7.46
10.94
21.39
-21-
64 and
under
65
0.84
0.89
0.94
0.99
1.05
1.12
1.19
1.27
1.36
1.47
1.59
1.72
1.88
2.06
2.27
2.54
2.87
3.28
3.84
4.61
5.64
7.34
10.75
20.97
Percentage for an increase
in total membership of 1
year to be used for a
member with NRD of 65
who was not a member
immediately before 01.04.98
65
0.85
0.90
0.95
1.00
1.06
1.13
1.20
1.29
1.38
1.49
1.60
1.74
1.90
2.08
2.30
2.56
2.89
3.31
3.86
4.63
5.66
7.36
10.77
21.00
0.48
0.50
0.52
0.54
0.56
0.58
0.61
0.63
0.66
0.69
0.72
0.75
0.79
0.83
0.87
0.92
0.97
1.02
1.08
1.15
1.22
1.30
1.39
1.50
1.62
1.75
1.90
2.07
2.28
2.52
2.77
3.06
3.44
3.94
4.63
5.66
7.36
10.77
21.00
January 2005
Pensions Handbook
Part I
Table 4
Added Years – Females – (1/60th) Accrual
Additional contributions, of the percentage of pay, to be made by an active member who has elected
to make additional contributions to the scheme to increase her total membership
Members over 45 at commencement of earliest period of membership
Age on
next
birthda
y after
election
Percentage for an increase in total membership of 1 year to be
used
by reference to the normal retirement date below of a member
who was a member immediately before 1 April 1998
60
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
1.83
1.98
2.17
2.39
2.65
2.96
3.35
3.85
4.51
5.43
6.71
8.82
13.03
25.64
Over
60 and
under
61
1.80
1.95
2.14
2.35
2.61
2.91
3.30
3.79
4.44
5.36
6.60
8.66
12.78
25.11
61
and
under
62
1.66
1.79
1.93
2.12
2.33
2.58
2.88
3.26
3.74
4.38
5.28
6.49
8.50
12.52
24.55
62
and
under
63
1.52
1.64
1.77
1.92
2.10
2.30
2.55
2.85
3.22
3.69
4.32
5.21
6.38
8.34
12.25
23.98
63 and
under
64
64 and
under
65
65
1.41
1.51
1.63
1.76
1.90
2.07
2.28
2.52
2.81
3.18
3.64
4.26
5.13
6.27
8.18
11.99
23.42
1.30
1.39
1.49
1.61
1.74
1.88
2.05
2.25
2.49
2.78
3.14
3.59
4.20
5.05
6.16
8.02
11.72
22.84
1.23
1.32
1.41
1.51
1.62
1.75
1.90
2.07
2.27
2.51
2.80
3.16
3.62
4.22
5.06
6.17
8.02
11.73
22.84
-22-
Percentage for an
increase in total
membership of 1 year
to be used for a
member with NRD of
65 who was not a
member immediately
before 1 April 1998
1.35
1.44
1.54
1.66
1.79
1.93
2.10
2.29
2.52
2.79
3.05
3.37
3.78
4.32
5.07
6.18
8.03
11.74
22.85
Definitions
January 2005
Pensions Handbook
Part J
DEFINITIONS
Casual


A scheme member who only works as and
when required, or
Who has a contract of less than 13 weeks
Contracted Out Earnings
The earnings between the Lower and Upper
Earnings Limits on which contracted-out
National Insurance contributions have been
paid.
Eligible Child
(1) The eligible child of a deceased member
is:(a) the deceased’s legitimate or adopted
child, or
(b) A child who was wholly or mainly
dependent on the deceased at the time
of his death.
(2) A person only counts as a child if:(a) he is aged under 17, or
(b) since he became 17 he has been
engaged continuously in full time
education or in training for a trade,
profession or vacation, or
(c) he is physically or mentally
incapacitated and became so whilst a
child within paragraph (a) or (b)
(3) If an appropriate Administering Authority
wish, they may treat education or training
as continuous despite a break
Final Pay
(For more detailed
explanation see Part H)
(1) A member’s final pay for an employment is
his pay for the last 365 days of his scheme
membership on which contributions have
been paid or would have been paid but for
a period of sickness or reserved forces
leave.
(2) In the case of part time employment, the
final pay is the pay, which would have
-1-
January 2005
Pensions Handbook
Part J
been paid for a single comparable whole
time employment.
(3) But in calculating the death grant or the
rate of surviving spouse’s or children’s
short term pension payable on the death of
an active member, actual pay in part time
employment is to be used.
(4) If a member is absent from work for any
reason (other than ill health) during his
final pay period, he is only to be treated as
having received the pay he would
otherwise have received if he has paid the
appropriate contributions for the period of
absence.
Normal Retirement Date
Those who joined the scheme for the first time
after 31 March 1998 – age 65.
Those who were members of the scheme
before 1 April 1998 – the date after age 60
when they had 25 years membership of the
scheme.
If they could never achieve this level of
service – age 65.
Occupational Health
Advisor (OHA))
The medical advisor must have one of the
following Occupational Health Qualifications.

Diploma in Occupational Medicine

Associateship of the Faculty of
Occupational Medicine

Membership of the faculty of Occupational
Medicine

Fellowship of the Faculty of Occupational
Medicine
Part Time
A scheme member who is employed for less
than 37, 39 or 40 hours (depending on their
employment).
Pensionable Pay
These payments are pensionable:
All the salary, wages, fees and other
payments paid to him for his own use in
-2-
January 2005
Pensions Handbook
Part J
respect of his employment
This will include any shift allowances,
bonuses, performance related pay, merit
awards, honoraria (except those
specifically awarded in lieu of overtime),
contractual overtime, Statutory Sick Pay,
Statutory Maternity Pay, and acting up
allowances. In short any payments (but
see below for those payments that cannot
be pensionable) that you are making to an
individual for doing the job that you are
employing them to do.

Any other payment or benefit specified in
his contract of employment as being a
pensionable emolument
This could include items such as clothing
and footwear allowances, medical
insurance, free meals, rent free (or
reduced rent) accommodation.
These payments cannot be pensionable:
Non-contractual overtime;

Travelling, subsistence or other allowance
paid in respect of expenses incurred in
relation to the employment;

Pay in lieu of annual leave;

Pay in lieu of notice;

Any payment made as an inducement not
to terminate employment;

Except for some very historical cases (see
below) – the monetary value of the
provision of a car or pay received in lieu of
car;
Where since 31 December 1992 a member
has been able to have the value of their lease
car included as part of his pay for pension
purposes, they can continue to do so, but this
shall cease if they leave employment with the
employing authority who were employing them
on 31 December 1992 (otherwise than as a
-3-
January 2005
Pensions Handbook
Part J
result of a transfer to another scheme
employer which is beyond his control); or if
they are neither provided with a motor vehicle
nor receive an amount representing the
money value to them of the provision of such
a vehicle.

School Achievement Awards
Variable Time
A scheme member who is paid fees or whose
pay is calculated on a sessional basis rather
than by reference to hours worked.
Whole Time
A scheme member who is employed for 37,
39 or 40 hours (depending on their
employment).
-4-
January 2005
Pensions Handbook
Part L
-5-