1. No category

Options and AVCs
AVC: contents
Options and AVCs
Section 3
options \ 3.m
AVCs
(Additional
Voluntary Contributions)
(1)
Issue 5: April 2006
AVC: contents
3.1
Options and AVCs
Money purchase AVC schemes
What are money purchase AVC Schemes?
Comparing the CSAVC scheme and FSAVC schemes
Eligibility to contribute to a money purchase AVC scheme
Service in the reserve forces (the Gulf conflict, 1991)
Career breaks
Benefits
Buying the annuity
Trivial CSAVC funds
Forfeiture of benefits
3.2
Administration - the CSAVC scheme
Participating financial institutions
The Declaration and The Rules of the Civil Service AVC (CSAVC)
scheme
Administration arrangements
CSAVC Headroom checking program
Annex A
3.3
CSAVC Administration Guide
deleted
Notes on best practice
1
Paying CSAVC benefits as a lump sum (CSAVC rule 4.5(ii))
options \ 3.m
(2)
Issue 5: April 2006
Options and AVCs
AVC: 3.1
3.1 Money purchase AVC
schemes
What are money purchase AVC Schemes?
Money purchase Additional Voluntary Contribution schemes
(money purchase AVC schemes) are arrangements for members to top
up their CSPS benefits.
3.1.1
3.1.2
Deleted
Generally, there is no regular contribution from the employer
to a money purchase AVC arrangement.
3.1.3
The rules, though, allow for employers to make direct contributions
into the CSAVC Scheme on behalf of their employees who wish nonconsolidated bonuses or pay to be paid into the CSAVC Scheme.
Employer contributions to the CSAVC Scheme should be paid in the
same way as those made by the employee.
The rules also allow for compensation to be paid to members for late
payment of contributions.
There is no longer a limit to the amount of contributions a
member can pay into the CSAVCS. However tax relief will only be
given on contributions up to the member’s gross taxable earnings for
that year.
3.1.4
HM Revenue and Customs (HMRC) has an Annual
Allowance (AA) for the total payments members, employers and any
third party can make to a member’s pension arrangements. The AA
for 2006/2007 is £215,000. It will be the member’s responsibility to
report to HMRC any payment they make over and above the AA and
they will be liable for the payment of tax at 40%
3.1.5
options \ 3.1
(1)
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AVC: 3.1
Options and AVCs
Information
Reference
CSAVCs
Leaflet: The Civil Service Additional
Voluntary Contribution Scheme
Buying Added Years for your Classic
Pension.
Further
information
Available from APACS.
Members benefits 1.4
Annual Allowance
3.1.6
•
•
•
•
•
•
•
Benefits of contributing to the CSAVCS
contributions to a CSAVC can be made by % deduction or
monthly amount from salary each month.
lump sum payments may also be made from salary or by
cheque at any time.
contributions can be varied or stopped at any time without
penalty.
an employer may contribute to the CSAVCS
the management charges are normally lower than other pension
arrangements. This is because the large number of CSPS
members has made it possible for especially favourable terms
to be negotiated with the CSAVC providers.
Additional lump sum death in service benefit (life cover) under
the CSAVC scheme can only be bought from Equitable Life
When the pension benefits are purchased with CSAVC funds
from, Scottish Widows, Standard Life, or Equitable Life the
Cabinet Office undertakes to make the pension payments in the
unlikely event that the company defaults. The undertaking
does not apply if the annuity is bought elsewhere on the open
market.
.
Eligibility to contribute to the CSAVC scheme
Contributions to the Civil Service AVC scheme can be made
only by members of the CSPS.
3.1.7
A member may contribute to a money purchase AVC scheme
3.1.8
at any time
options \ 3.1
(2)
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Options and AVCs
AVC: 3.1
A member over the retiring age who remains in service,
without taking CSPS benefits, may continue to contribute to the CS
AVC Scheme, providing they are a member of the CSPS.
3.1.9
3.1.10
A member who formally retires and receives the pension
lump sum but remains in service after the retiring age cannot continue
contributing to the CSAVC Scheme. CSAVC benefits must be
deferred until the CSPS pension comes into payment and can then be
taken or continue to be deferred as long as benefits are taken by the
day before the member’s 75th birthday.
Once a member reaches age 75 they can no longer take 25%
of their fund as a lump sum
3.1.11
3.1.12
Deleted
Career breaks
AVCs are suspended when a member is on a career break.
When the member returns, their contributions to CSAVCs should be
re-instated. APACs should advise member of re-instatement.
Procedures as set out in section 5 of Annex A.
3.1.13
Benefits
Under a money purchase AVC scheme a CSPS member
contributes to an investment scheme with a financial institution to
provide, over and above what the CSPS provides, one or more of the
following:
3.1.14
• an additional income for the member in retirement;
• a maximum tax free lump sum of 25% of the member’s fund
value or if a lesser amount 25% of the remaining Lifetime
Allowance
• additional spouse/civil partner’s benefits;
• an additional lump sum death in service benefit on top of the
death benefit of twice pensionable pay paid under the PCSPS
when a member dies in service.
Contributions to a money purchase AVC scheme cannot
normally be used to increase the CSPS retirement lump sum.
3.1.15
The rules of the CSAVC scheme allow CSAVC benefits to be
paid entirely as a lump sum when the member is in exceptional
circumstances of serious ill health and no benefits have been paid.
3.1.16
options \ 3.1
(3)
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AVC: 3.1
Options and AVCs
( see Notes on best practice: 3N at the end of this section for advice on
how this provision is applied.)
Employing Departments must make sure that any member
who might meet the criteria for a Serious Ill Health lump sum payment
has their attention drawn to the facility.
3.1.17
Buying the CSAVC pension benefits
A member who contributed to a money purchase AVC
arrangement can use the proceeds of their money purchase AVC fund
(contributions plus interest or bonuses) to buy one or more of the
following:
3.1.18
• Pension or pension and lump sum from an insurance
company or friendly society to supplement the member’s own
PCSPS pension;
• an annuity from an insurance company or friendly society to
supplement the CSPS spouse/civil partner’s pension
Pension benefits may be bought from any UK branch or office
of an insurance company which is authorised to carry on long term
insurance business or any authorised provider as defined under section
1(9) of the Superannuation Act 1972.
3.1.19
From 18 December 2006 a CSAVCS member can take their
AVC benefits from age 55 regardless of whether or not they have
drawn their main scheme benefits. Some members will have a
protected right to take their CSAVCS benefits from age 50 if they were
in service before 6 April 2006 and had taken their CSAVC out before
that date. Alternately, members may defer purchasing their pension
benefits any time up to the day before they reach age 75.
3.1.20
options \ 3.1
(4)
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Options and AVCs
AVC: 3.1
Table 1 When Pension benefits bought with a CSAVC fund start to be
paid
Beneficiary
Circumstances
Start date
Member
Member reaches age 55 or 50 if they
have a protected right in the main
scheme to take their pension benefits
from age 50 and started paying into the
CSAVCS before 6 April 2006
The money purchase AVC
benefits are paid immediately
Member’s
spouse/civil
partner
Benefits bought to supplement a
spouse/civil partner’s pension.
When the member dies and a
CSPS spouse/civil partner’s
payment is paid.
3.1.21
Deleted
Trivial CSAVC funds
3.1.22 HMRC will allow a refund of pension contributions if all
pension benefits added together are 1% or less of the Lifetime
Allowance.
All CSAVC providers have assured Cabinet Office that however small
a member’s fund is at time of crystallisation they will set up an annuity
for the member. Depending on the value of the annuity it may only be
paid on an annual basis. The member will still be able to take up to
25% as a lump sum before the annuity is set up.
If in the future any of the CSAVC providers decide that a member’s
fund value is too small to set up annuity the APACs must write to Civil
Service Pensions Division regarding possible transfer of the CSAVC
fund into the CSPS. If such a transfer is agreed, only personal benefits,
without a lump sum, may be purchased, the level of which will be
determined by HBW. The member will not be able to take part of his
CSAVC fund as a lump sum before the transfer takes place
3.1.23 In writing to CSP, APACs must provide the following
information:
•
•
•
•
•
•
•
name
date of birth
date of retirement
age at retirement
reckonable service
pensionable earnings
value of CSAVC fund
options \ 3.1
(5)
PC272: January 2007
AVC: 3.1
•
Options and AVCs
details of estimates from providers approached for an
annuity.
Please note that this concession applies only to members’
CSAVC Scheme funds
3.1.24
Information
Reference
Further
information
Members benefits 1.4
Lifetime Allowance
Forfeiture of benefits
3.1.25 In circumstances where forfeiture applies to a member’s main
scheme benefits, the Minister has the power to withhold CSAVC funds
and related pension benefits arising from employer contributions.
Information
Reference
Further
information
Pensions Manual
Forfeiture of benefits
options \ 3.1
Members’ Benefits: section 3.4
(6)
PC272: January 2007
3.2 Administration - the
CSAVC scheme
Participating financial institutions
Members may pay contributions under the Civil Service AVC
scheme to:
3.2.1
• the Scottish Widows’ plc; and
• the Standard Life Assurance Company.
• the Equitable Life Assurance Society (only open to existing
members)
3.2.2
Contributions may also be paid to:
• the Equitable Building Society Fund (via Equitable
Life);(only open to existing members)
Additional lump sum death in service benefit (life cover)
continues to be available through Equitable Life.
3.2.3
When the CSAVCS benefits crystallise the member can
choose to take up to 25% of their fund or if a lesser amount 25% of the
member’s Lifetime Allowance as a tax free lump sum.
3.2.3a
The annuity bought with the member’s CSAVC fund on
retirement does not have to be bought from a CSAVC provider i.e.
Scottish Widows, Standard Life or Equitable Life. It may be bought
from any UK branch or office of an insurance company which is
authorised to carry on long term insurance business.
3.2.4
When the annuity bought with the member’s CSAVC fund is
from either Scottish Widows, Standard Life, or Equitable Life, the
Cabinet Office undertakes to make the pension payments in the
unlikely event that the company defaults. This undertaking does not
apply if the annuity is bought from any other financial institution.
3.2.5
options \ 3.2
(1)
Issue 5: April 2006
The Declaration and The Rules of the Civil Service
AVC (CSAVC) scheme
The CSAVC Scheme was introduced by the Treasury under
Section 1 of the Superannuation Act 1972 to provide statutory cover
for the Civil Service AVC arrangements.
3.2.6
The Declaration of the scheme and the Rules of the scheme
came into force on 1 January 1989.
3.2.7
3.2.8
The Declaration of the scheme:
• sets out the purposes of the scheme;
• describes in outline the arrangements for the scheme; and
• establishes the CSAVC as a registered under Chapter 2 of
Part 4 of the Finance Act 2004
3.2.9
The Declaration is reproduced in volume 2 of the scheme
rules.
The Rules of the scheme, which were promulgated as a
schedule to the Declaration, are also reproduced in volume 2 of the
scheme rules.
3.2.10
Administration arrangements
The arrangements governing the administration of the Civil
Service AVC scheme are set out at Annex A.
3.2.11
3.2.12-3.2
options \ 3.2
Deleted.
(2)
Issue 5: April 2006
Options and AVCs
AVC 3.2 Annex A
ANNEX A
CSAVC Administration Guide
Date
: January 2007
Author
: CSP/APAC/Provider Team
Version
: Final
Options and AVCs
AVC 3.2 Annex A
TABLE OF CONTENTS
1.0 NEW MEMBER JOINING SECTION
1.1 JOINING INSTRUCTIONS
ANNEX IA ADDITIONAL DEATH IN SERVICE LIFE COVER
2.0 PAYMENT/CONTRIBUTIONS SECTION
3
3
5
20
20
2.1 MAKING A PAYMENT
20
2.2 OVERPAYMENT OF CONTRIBUTIONS
ERROR!
2.3 INCREASING OR DECREASING LEVEL OF CONTRIBUTIONS (NO CHANGE TO INVESTMENT ROUTE)
BOOKMARK NOT DEFINED.
2.4 CHANGES OF INVESTMENT ROUTES (NO CHANGE TO CONTRIBUTION LEVEL) ERROR! BOOKMARK NOT DEFINED.
ERROR! BOOKMARK NOT DEFINED.
2.5 CHANGING LEVEL OF CONTRIBUTIONS AND INVESTMENT ROUTE
3.0 TRANSFERRING MONEY INTO THE CSAVC SCHEME
3.1 TRANSFER VALUES INTO THE CSAVCS
3.2 TRANSFERS/SWITCHING OF AVCS BETWEEN EQUITABLE LIFE, SCOTTISH WIDOWS AND STANDARD LIFE
4.0 LUMP SUM CONTRIBUTIONS
4.1 MAKING A LUMP SUM CONTRIBUTION
4.2 EMPLOYER CONTRIBUTIONS
5.0 MEMBER LEAVING SCHEME BEFORE RETIREMENT
5.1 TRANSFERING OUT OF THE CSAVCS
5.2 SURRENDER VALUE (LESS THAN 2 YEARS COMBINED SERVICE)
5.3 BENEFITS DEFERRED IN THE PENSION SCHEME UNTIL RETIREMENT
5.4 LEAVING THE CIVIL SERVICE AVC SCHEME (WHILST REMAINING IN THE CIVIL SERVICE)
26
28
29
39
39
40
46
46
47
48
48
6.0 DEATH IN SERVICE
61
7.0 RETIREMENT SECTION
66
7.1 OPTION A: PURCHASING AN ANNUITY FROM THE PROVIDER
7.1A MEMBER IN EXCESS OF THE LIFETIME ALLOWANCE
7.2 OPTION B: OPEN MARKET OPTION
7.3 OPTION C: DEFER PURCHASING AN ANNUITY
71
68
69
73
8.0 MONITORING OF THE MEMBER’S BENEFITS THIS SECTION HAS BEEN DELETED
9.0 SCHEME ANNIVERSARY
988
10.A COMPREHENSIVE LIST OF ALL FORMS AND LETTERS INCORPORATED IN THE MANUAL 99
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Note : throughout this guidance reference is made to CSPS (Civil Service Pension Scheme). In all cases the reference
only covers membership of ‘classic’, ‘classic plus’ and ‘premium’. It does not include staff who are covered by the
partnership pension arrangements as they cannot contribute to the Civil Service AVC Scheme. (CSAVCS)
1.0 NEW MEMBER JOINING SECTION
1.1 JOINING INSTRUCTIONS
To be able to contribute to the CSAVCS a person must be a member of the CSPS.
The following are the steps typically followed by a member joining the CSAVCS through The
Scottish Widows plc (SW) or Standard Life Assurance Company (SLAC).
1. Member obtains the leaflet ‘A Brief Guide: The Civil Service Additional Voluntary Contribution
Scheme’ from the relevant APAC or downloads the leaflet from Civil Service Pension’s website at
www.civilservice-pensions.gov.uk . The leaflet gives the contact details for each Provider. If the
member contacts the APAC for a leaflet issue (Letter 1B)
2. Member obtains joining/ information pack from the provider. The telephone numbers to obtain a
joining pack are:
SW
-
0800 028 4419
SLAC -
0800 33 33 04
The joining pack will include a booklet containing relevant information, an application form, ready
reckoner and a change form (for change of investment fund and change in level of contribution).
Note:
For additional life cover contact ELAS (0870 607 6791) as they are the sole Provider of this facility
under the Civil Service AVC Scheme (see Annex 1A)
3. Member completes application form(s) and returns application to appropriate Provider or the
APAC. If a member needs help in completing application or supplementary information helplines
are available. The helpline numbers are:
SW
0800 028 4419
SLAC -
0800 33 33 04
4. The Provider or APAC checks the application form
5. The application form at this point can follow two routes:
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3
Options and AVCs
AVC 3.2 Annex A
NEW PROCESS FOR JOINING THE CSAVCS.
Application form returned to the APAC.
Application form returned to the Provider
Ø
Ø
The APAC Checks that the form has
been completed correctly, signs it and
takes a copy. A copy is put on the
members file and the original goes to
the provider (letter 1D). If the
application form is not completed
correctly the APAC should return it to
the member.
The Provider checks the form has
been completed correctly and sets
up the member on the system and
awaits payment. A copy of the
form is sent to the APAC.
Ø
Ø
The APAC notifies the payroll of the amount to be deducted from
the member and updates Penserver.
Ø
The APAC confirms to the member that deductions will commence from a certain
date and sends the member a death nomination form to complete. The letter reminds
the member to check to make sure that deductions have commenced by checking their
payslip, they can also check on line. (Letter 1C)
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Options and AVCs
AVC 3.2 Annex A
Annex 1A: Additional Death In Service Life Cover
Where a member makes an application for life assurance, cover for the benefits will commence
from the date on which the APAC receives the application form. Equitable life will maintain cover
for up to 3 months from the date of assuming risk on normal terms. Underwriting will take place
during this period to determine the terms that will apply from the end of this period. APACs should
indicate this to the member by completing the notification letter (Letter 1A). A copy should be kept
on file and a further copy (along with the member’s application form) should be sent to Equitable
Life. If it is necessary for the Equitable to obtain any further medical evidence in respect of the
member then the Equitable will make appropriate arrangements for this.
The member will be covered for the proposed life assurance benefits.
Having completed consideration of the risk the Equitable Life will either:
(i) continue life cover after 3 months initial period on normal terms in which case there will be no
further communication from Equitable Life; or
(ii) offer to continue life cover after 3 months initial period on special terms, in which case the
Equitable will issue a letter advising the member of the terms it is willing to offer. If these terms are
not accepted within 3 months of the date of assuming risk then the Equitable will issue a letter
withdrawing cover and will refund any excess premiums without interest; or
(iii) decline to offer terms, in which case the Equitable will normally issue a letter advising the
member that cover will cease 3 months after the date of assuming risk. When cover ceases any
excess premiums will be refunded without interest.
If for any reason the Equitable is unable to obtain the information it requires to assess the risk, then
the Equitable will issue a letter 3 months from the date of assuming risk withdrawing terms and will
refund any excess premiums without interest. Only employees who are actively at work may apply
for AVC life assurance benefits. The Equitable reserves the right to defer/decline to offer terms for
assurance and to cease risk immediately if appropriate. This action will be taken if, for example, it
appears that the immediate temporary cover facility is being allowed to obtain cover for individuals
on their death bed (i.e. uninsurable cases).
Contributions
Contributions in respect of life assurance benefits should commence immediately. The premium for
a particular sum assured can be calculated using the table in the Equitable Life booklet. The
maximum additional life cover that can be purchased is 2 times salary for members of the classic
scheme and 1 times salary for members of the classic plus and premium schemes.
Increase Procedure
Any increase in contribution for additional cover will be based upon the member’s age next
birthday at the date of the increase, and may be subject to further evidence of health. The level of
life cover secured by the existing contributions and premium paid will remain unaffected.
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Decrease Procedure
Any decrease in contribution will result in a proportionate decrease in sum assured and vice versa
on existing terms. Members wishing to decrease their life cover should be notified to the Equitable
in writing.
Members working past 60 who wish to keep the same level of life assurance cover will need to up
rate their contributions on an annual basis. Equitable Life will contact APACS on an annual basis at
the end of each tax year detailing all the members that have turned 60 within the last year. APACs
must notify members giving them the following choice.
a) Uprate their monthly contribution to keep the same level of life cover or:
b) Keep the same level of contribution but receive lower cover.
If the member does not reply the amount of life cover will automatically decrease by default.
If the member should die between the time he reaches pension age and the end of the tax year. (ie
before EL notify the APAC) EL will pay out the higher rate life cover.
Equitable Life will continue to send out annual reminders with details of the new contributions
needed to maintain the same level of life assurance cover. If the member chooses to increase their
contributions these must be backdated to the member’s birthday. It would therefore be preferable if
APACs run a pensioner report to ascertain who needs to be contacted 2 months before they reach
pension age liaising with EL to obtain details to pass to the member.
See letters 1E to 1J:
• 1E. Letter to Equitable Life enquiry concerning new rate of contributions for 60+
• 1F. Letter to member informing them of their choice for 60+ life cover
• 1G. confirmation to member of choice
• 1H. confirmation to Equitable Life of choice.
• 1J Letter to member to inform of their options for 60+ life cover subsequent years.
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Letter 1A: Letter to member re application for additional death in service
life cover
CIVIL SERVICE AVC SCHEME
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION SCHEME (CSAVCS) ADDITIONAL LIFE
COVER
NATIONAL INSURANCE NUMBER
Thank you for your application for additional life assurance cover which was received on
Your application
is currently being considered by Equitable Life Assurance Society. In the interim Equitable Life have assumed
risk on normal terms for an initial period of up to three months from the date your application was received.
Initially, the sum insured is [administrator to insert amount] and the premium is [administrator to insert amount]
per annum. Equitable Life’s underwriters may request additional information but will cover you for life
assurance during this period.
Once Equitable Life has completed their consideration of risk, they will either:
•
continue life cover after the initial three months’ period on normal terms, in which case there will be no
further communication from them; or
•
offer to continue life cover after the initial three months’ period on special terms, in which case they will
issue a letter advising you of the terms they are willing to offer. If these terms are not accepted within
three months of accepting risk, Equitable Life will issue a letter withdrawing cover and will refund any
excess premiums without interest; or
•
decline to offer terms, in which case they will normally issue a letter advising you that cover will cease
three months after the date of assuming risk. However, Equitable Life reserves the right to withdraw
cover without notice at any time during the three months after the date of assuming risk. When cover
ceases, any excess premiums will be refunded without interest.
If for any reason Equitable Life cannot obtain the information needed to assess the risk, they will issue a letter
three months from the date of assuming risk, withdrawing terms and will refund any excess premiums without
interest.
I hope this is helpful to you but please let us know if anything is unclear.
Yours sincerely
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Form 1.1 : Nomination/Revocation for Death Benefit
CIVIL SERVICE AVC SCHEME
Please complete in black ink and in block capitals.
Member’s Name:
Address:
Postcode:
Telephone No:
Signed:
National Insurance No:
Date:
• I understand that completion of this form revokes my former nomination.
• I nominate the person/persons named below to receive any death benefit payable under rule 4.6 of the Civil Service
AVC Scheme. If you wish to make more than two nominations you should contact your APAC for a supplementary form
Form 1.2.)
Nominee
Full name (including title):
Address:
Postcode:
Nominee
Full name (including title):
Address:
Postcode:
Witness (must not be the person or persons nominated)
Signed:
Date:
Name:
Address:
Postcode:
Note: Your nominee/s can be individuals (including a child) or an incorporated/unincorporated body (e.g. a bank,
partnership or a firm of solicitors). You may nominate more than one individual.
For departmental use
The above nomination has been recorded and any previous nomination has been cancelled.
Signed:
Date:
Name:
Tel:
Office Address:
Please see over for important notes.
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
IMPORTANT NOTES
NB This nomination form is for the Civil Service AVC Scheme only. Any nomination which you have completed for
benefits in the main scheme (CSPS) is not valid for the CSAVC Scheme.
1. You will be sent a copy of this form to keep.
2. You are responsible for:
•
making sure that your nominee knows the terms of this nomination;
•
instructing your nominee on any terms of distribution of the death benefit paid under this nomination;
• making sure that you tell the employer/APAC if there is a change in your nominee's address. (If your nominee
had moved, there is a risk that the Cabinet Office may consider that payment is not reasonably practicable.)
• informing your department/APAC if the nomination is for your husband/wife/civil partner and your marriage/civil
partnership has come to an end.
3. The nomination will not be valid, at the time of your death, if:
•
the nominee is your husband/wife/civil partner and the marriage/civil partnership has ended;
•
the nominee has died; or
• the Cabinet Office considers at that time that payment of the death benefit to the nominee is not reasonably
practicable.
4. The death benefit will be paid to your personal representative if there is no valid nomination.
5. A court may, at the time of a divorce/dissolution, order that on the death of a scheme member, or former member, all
or part of the death benefit be paid to the former spouse. Where this is the case, any balance will be paid to the
nominee, or to the personal representative of the deceased where there is no valid nomination.
6. If you use the supplementary form 1.2 it must be signed by your witness and stapled to this form (Form 1.1).
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Form 1.2 : Supplementary Form to Form 1.1
Nomination/Revocation for Death Benefit
CIVIL SERVICE AVC SCHEME
Please complete in black ink and in block capitals.
Member’s Name:
Address:
Postcode:
Telephone No:
Signed:
National Insurance No:
Date:
Nominee
Full name (including title):
Address:
Postcode:
Nominee
Full name (including title):
Address:
Postcode:
Nominee
Full name (including title):
Address:
Postcode:
Nominee
Full name (including title):
Address:
Postcode:
Witness (must not be the person or persons nominated)
Signed:
Date:
Name:
Address:
Postcode:
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Letter 1B: Letter to member re request for CSAVC information.
Civil Service AVC scheme
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION SCHEME (CSAVCS)
Thank you for your request for information about the CSAVCS.
I enclose the leaflet The Civil Service Additional Voluntary Contribution Scheme which provides a brief guide to
how you can boost your retirement income by making additional voluntary contributions to one or more of the
CSAVCS providers.
You can obtain a joining/information pack by telephoning the CSAVCS providers as follows:
Scottish Widows’ Fund and Life Assurance Society helpline on 0800 028 4419
Standard Life Assurance Company helpline on 0800 33 33 04
You can also provide extra life cover by making contributions to Equitable Life Assurance Society helpline,
their contact number is 0870 607 6791.
The joining pack will include an application form and other important information. If you wish to proceed, you
should complete the application form and return it to the appropriate provider or to us at the above address. If
you require help in completing the application form please ring the relevant provider on their dedicated helpline
number given above.
If we can also be of help, please let me know.
Yours sincerely
Enc
Leaflet The Civil Service Additional Voluntary Contribution Scheme
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Letter 1C: Letter to member confirming application/ monthly
contributions
CIVIL SERVICE AVC SCHEME
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTIONS (CSAVC) SCHEME
APPLICATION CONFIRMATION
NATIONAL INSURANCE NUMBER:
Thank you for your application to contribute to the CSAVCS by monthly contributions to Scottish
Widows/Standard Life. I confirm that arrangements have been made to commence regular monthly
deductions from your salary of (insert
% or amount £
) from your [ insert month ] salary.
Deductions will continue at this percentage rate/rate until you instruct otherwise.
Please remember to check your payslips to ensure that deductions start at the correct time and are made at
the correct rate. If anything appears to be wrong, please let us know immediately.
Also enclosed is a death benefit nomination form. If you wish to make a nomination, you should complete and
return this form to the above address. Please note that this nomination form is specifically for the CSAVCS
and is entirely separate from any death benefit nomination you may have made under the Civil Service
pension scheme.
Please let us know if you change your address at any time so that we can notify [insert name of provider] and
amend our records.
Yours sincerely
Enc: Information leaflet IF 1
Death benefit nomination Form 1.1
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
LETTER 1D – Letter to provider with application form
Civil Service AVC Scheme
Dear Sir/Madam
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION SCHEME (CSAVCS)
Reference:
I enclose the original application form for (Insert members name) to commence contributing to the CSAVCS.
If you have any questions about the information provided, please let us know.
Yours sincerely
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
IF 1: Information leaflet
CIVIL SERVICE AVC SCHEME
1. Contributions
Contributions made to a CSAVC contract are no longer restricted. However, you should be aware that any
contributions you pay will count towards the Annual Allowance. If the value of your total pension savings
exceeds the Annual Allowance you will have to report this to HM Revenue and Customs and will be liable for
any extra tax payable
2. Benefits Outcome
The level of benefits to be provided from a money-purchase AVC contract in return for a given level of
contributions cannot be accurately predicted until retirement or death, if earlier. The benefits will depend on the
investment performance of the AVC fund and the cost of annuities which can go up or down.
Benefits in Excess of the Lifetime Allowance (LTA)
If by taking your CSAVC you exceed the (LTA) additional tax will be deducted by your provider and sent to
HMRC before your annuity is set up or any lump sum is paid. Tax will be payable on any funds in excess of
the LTA at the rate of 55% if taken as a lump sum and 25% if taken as an annuity. It is up to individuals to
monitor their CSAVC fund to ensure they are within the LTA.
Death Before Retirement
As a member of the CSAVCS, you may wish to complete a death benefit nomination form for the disposal of
your funds in the event of your death before retirement. Your beneficiary will then be able to receive the full
value of your CSAVC fund as a lump sum.
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Letter 1E: Letter to Equitable Life re Life Assurance cover post 60.
Civil Service AVC Scheme
To Equitable Life
Dear
Civil Service Additional Voluntary Contribution Scheme (CSAVCS) – Life Assurance Cover
Member Name
Member No
National Insurance Number
DOB
(Insert member name) is coming up to age (insert age) and has Life Assurance Cover with Equitable Life. In
order that we can advise (Insert name) of his/her choices please can you let me have the following information
as soon as possible.
The new contribution rate required to maintain Life Cover Assurance of £ (insert current amount)
The reduced amount of Life Assurance Cover if the current monthly contribution rate is not increased.
Yours faithfully
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Letter 1F: Letter to member re options for Life Assurance Cover post 60
Civil Service AVC Scheme
Dear
Civil Service Additional Voluntary Contribution Scheme (CSAVCS)
I am writing to you as you have Life Assurance Cover with Equitable Life under the CSAVCS. The Life
Assurance agreement you took out with Equitable Life is only guaranteed at your current monthly contribution
rate until your reach your 60th birthday on (insert date). From that date you will have two options:
a) to continue paying a monthly contribution of £ (insert amount) and your Life cover will reduce to £
(insert amount) from (insert date of 60th birthday) or
b) to increase your monthly contribution to £ (insert new rate) from (Insert 60th birthday) this will
maintain your Life Assurance cover of £ (inset amount) for the next 12 months.
If you choose option b) Equitable Life will review your contributions rate in 12 months time.
Please let us know your choice by completing one of the boxes below and on the attached copy letter and
return it to us at the above address.
If we do not receive a reply in the next 4 weeks we will assume you do not wish to increase your monthly
contribution rate and understand your Life Cover Assurance will reduce as indicated.
Yours sincerely
I wish to increase my monthly contribution rate to £ (insert amount) and by doing so I will
maintain my current level of Life Assurance Cover with Equitable Life. I authorise these
contributions to be deducted from my salary commencing on (insert 60th birthday).
I do not wish to increase my monthly contributions and understand that by doing so my level of
Life Assurance Cover will reduce.
SIGNED……………………………………………………….
NAME IN FULL………………………………………………………………………………………..
DATED…………………………………………………………
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Letter 1G: Letter to Member confirming Post 60 Life Cover Choice
Civil Service AVC scheme
Dear
Civil Service Additional Voluntary Contribution Scheme (CSAVCS)
Thank you for your authorisation to increase your monthly contribution rate to £ (insert amount) from (insert
date). This will maintain your current level of Life Assurance Cover with Equitable Life under the CSAVCS for
the next 12 months.
Payroll has been instructed to collect your new monthly contribution rate from your (insert month) salary.
Please remember to check your payslip to confirm that contributions are being deducted at the appropriate
rate.
We will contact you again in approximately 12 months time to review your policy. Please be aware that your
Life Cover will cease immediately on leaving the Civil Service.
If you have any problems regarding this letter please contact us on the number at top of this letter.
Yours sincerely
PC272: January 2007
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AVC 3.2 Annex A
Letter 1H: Letter to Equitable Life concerning members post 60 Life
Assurance cover choice.
Civil Service AVC Scheme
To: Equitable Life
Dear
Civil Service Additional Voluntary Contribution Scheme (CSAVCS) – Life Assurance Cover
Member Name:
Member No
National Insurance Number
DOB
*Delete as necessary
* (Insert member name) is increasing his/her contribution rate to £ (insert new rate) from (insert date) to
maintain the current level of Life Assurance cover of £ (insert amount).
*(Insert member name) is maintaining his/her current monthly contribution rate of £ (insert rate) and
understands the Life Assurance cover will be reduced to £ (insert amount) from (insert date).
Please amend his/her records accordingly.
Yours faithfully
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
LETTER 1J: Letter to member concerning Continuing Life Assurance
Choices post 60
Civil Service AVC Scheme
Dear
Civil service Additional Voluntary Contribution Scheme (CSAVCS)
We contacted you last year regarding your Life Assurance Cover with Equitable Life under the CSAVCS and
you increased your contributions to £ (insert amount) to maintain your Life Assurance Cover of £ (insert
amount). As you are now reaching your (insert forthcoming age) birthday your contributions will need to be
increased once again to maintain the same level of life cover. You therefore have the following options:
a) to continue paying a monthly contribution of £ (insert amount) and your Life Cover will reduce to £
(insert amount) from (insert date of next birthday) or
b) to increase your monthly contribution to £ (insert new rate) from (insert next birthday) this will
maintain your Life Assurance cover of £ (inset amount) for next 12 months.
If you choose option b) Equitable Life will review your contributions rate in 12 months time.
Please let us know your choice by completing one of the boxes below on the attached copy letter and return it
to us at the above address.
If we do not receive a reply in the next 4 weeks we will assume you do not wish to increase your monthly
contribution rate and understand your Life Cover Assurance will reduce as indicated.
Yours sincerely
I wish to increase my monthly contribution rate to £ (insert amount) and by doing so I will
maintain my current level of Life Assurance Cover with Equitable Life. I authorise these
contributions to be deducted from my salary commencing on (insert date of next birthday).
I do not wish to increase my monthly contributions and understand that by doing so my level of
Life Assurance Cover will reduce.
SIGNED…………………………………………………………….
NAME IN FULL………………………………………………………………………………………………
DATED……………………………………………………………..
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
2.0 PAYMENT/CONTRIBUTIONS SECTION
2.1 Making a Payment
There are two methods of making payment:
i)
Through the Bankers Automated Clearing System (BACS) - Under the BACS approach,
both monies and data are sent electronically. This is the preferred means of payment as it is the most
secure and ensures speedy investment of members’ contributions.
ii)
By cheque - under the cheque approach, each periodic payment should be made payable to
either, ‘Scottish Widows plc’, ‘Standard Life Assurance Company’ or, ‘The Equitable Life
Assurance Society’ as appropriate and should be accompanied by the relevant data.
Data can be presented by paper schedule, disk or e-mail. Magnetic tape may be accepted following
discussion with the Provider. Particularly where more than 20 members are involved, it is preferable
that data is presented electronically as this ensures greater integrity of the process.
Where a member’s premium is to be spread between two or more different investment routes (i.e.
With Profits, Unit Linked, Deposit or Life Assurance) it is not necessary for you to split the
premium, this will be done by the Provider.
On receipt, the Providers will check that the amount of the payment agrees with the amount on the
data. Where the two figures do not balance, the data will not be processed until agreed changes are
made to ensure reconciliation. If reconciliation cannot be achieved following discussions with the
payroll department, the payment will be returned to the source of payment. If the data on a magnetic
tape or disk cannot be read, the payment and data will be returned to enable a clean transfer at a
later date. Data that is not accompanied by a payment, or a payment not accompanied by data will
not be processed, as this would cause difficulties on the Providers’ computer systems.
The employer sends, to each Provider, a complete listing of all members and their contribution
details each time a payment is submitted to the Provider(s). A standard format for the contribution
schedule (Form 2.1) is at the end of this section.
NOTE: The APAC will notify the payroll directly about member contributions where this has been
agreed with the employer. Otherwise, the APAC will provide the employer with instructions for
their payroll.
2.2 Overpayment of Contributions
In the event of overpayment of a member’s contributions, (eg the contribution amount taken out
twice, late notification of leaving) the APAC should make a separate claim for reimbursement from
the Provider in writing, including:
•
The reason for the refund
•
To whom the payment should be made payable
This information will provide an audit trail. The Provider will refund monies (with interest) through
a cheque or BACS payment to the relevant APAC. The APAC must arrange for the refund to be
processed through payroll, liaising with the employer as agreed, to ensure the appropriate tax
deduction is made. The refund should be paid into a suspense account and not into the Civil
Superannuation Vote. Income tax should be deducted at 32% for basic rate taxpayers. For higher
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
rate taxpayers the calculation is more complicated. An example for a surplus of AVC funds of
£1,000 is given below.
Example
STEP A
STEP B
Surplus
Less tax
=
=
£1,000
£ 320
Payable to member
=
£ 680
The member receives £680. This is treated as income which has suffered basic rate
tax of 22%, viz.
Net received
=
£ 680
Grossed up at basic
rate
=
£ 871.79 (amount to be certified and declared in
employee’s tax return)
If the member is a basic rate taxpayer, there is no further liability.
STEP C
If the member is a higher rate taxpayer they will be charged at the higher rate on the
grossed-up repayment, viz.
£871.79 @18%
(40% - 22%)
=
£ 156 further liability
NB For 1997/98 – 1999/00 the basic rate of income tax was 23%, for 1996/97 it was 24% and for
earlier years ie 1992/93 – 1995/96 it was 25%.
2.3 Increasing or Decreasing Level of Contributions (no change to investment route)
To change the contribution level the member should obtain a copy of the ‘change’ form (Form
2.1a) from their APAC. The form will instruct members to complete and return the form direct to
the APAC.
On receipt of the change form the APAC should immediately instruct the employer/payroll* to
deduct the new level of contribution and confirm to the member that the change has been made.
(Letter 2A)
The APAC will notify the payroll directly about member contributions and any changes where this
has been agreed with the employer. Otherwise, the APAC will provide the employer with
instructions for their payroll.
Note 1:
CSAVC contributions must stop if a member goes onto no pay or is being paid at pension rate, or
when the member goes onto half pay and has insufficient salary to pay them. Deductions must be
automatically restored when the member returns to full pay or has sufficient salary to cover the
contributions. The APAC must notify the Provider when this situation occurs.
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
2.4 Changes of Investment Routes (no change to contribution level)
Unfortunately not all providers have the same process for changing the investment route. For
Scottish Widows and Standard Life the member should telephone their CSAVC provider for
assistance. Both providers will change the investment route over the telephone and will confirm
details of the change to the member once the process is completed.
Equitable Life need written confirmation from the APAC of the change. APACs should ask the
member to write in to them with clear instructions detailing the changes they wish to make. The
APAC will then need to forward the member’s letter to Equitable Life with a covering note to
action the attached instructions.
2.5 Changing Level of Contributions and Investment Route
The process described in both paragraph 2.3 and 2.4 should be followed.
If the member wishes to stop contributions altogether the APAC should ask them to put it in
writing. Once the payroll has been notified the APAC should send out (Letter 2B) to the member.
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Form 2.1: The Standard Format for the Contribution Schedule
CIVIL SERVICE AVC SCHEME
PENSION SCHEME NAME :
Civil Service AVC Scheme
SCHEME NUMBER:
DEPARTMENT and LOCATION:
DEPARTMENTAL CONTACT (name & telephone number for schedule queries):
MEMBER’S NAME
(SURNAME)
MEMBER’S NATIONAL
INSURANCE NUMBER
AVC AMOUNT
Once completed by the employer/APAC (see 2.1) this form should be sent to the relevant
AVC Provider.
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
LETTER 2A: Letter to member confirming contribution level
Civil Service AVC Scheme
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION SCHEME (CSAVCS)
Thank you for your application to increase/decrease your AVC contributions with (insert name of provider).
I confirm the new contribution rate of £ (Insert amount) will be deducted from your salary on a regular monthly
basis commencing from (insert date). *
I confirm the new contribution rate of (insert percentage) % of your salary will be deducted on a regular
monthly basis commencing from (insert date) *
* please delete as appropriate
You are reminded to check your payslips to ensure that deductions start at the correct time and are made at
the correct rate. If anything appears to be wrong please inform us immediately.
Yours sincerely
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
LETTER 2B: Letter to member ceasing contributions.
Civil Service AVC Scheme
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION SCHEME (CSAVCS)
I am writing to you about your CSAVCS with (Insert name of provider) following your request to stop
contributing to the CSAVCS.
Your fund will continue to be invested with (Insert name of provider) and the proceeds will be used by you to
buy an additional pension/lump sum when your Civil Service pension comes in to payment. We will contact
you when you reach pension age and tell you the options available to you at that time.
You also have the option of transferring your CSAVC fund out to any UK registered pension scheme or to a
Qualifying Recognised Overseas Pension Scheme (QROPS).
If your address or circumstances change please let us know.
Please also let us know if you need any further information.
Yours sincerely
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
FORM 2.1a: Change of Contribution form
CIVIL SERVICE AVC SCHEME
You recently requested a CSAVCS change form to change the level of contributions you currently pay to the CSAVCS.
Please complete all sections accurately in BLOCK CAPITALS and sign and date the form.
A. Your details
1.Your title
Mr
Mrs
Miss
Ms
(Please specify)
Other
2. Your Surname
3. Your first name(s)
4. Your date of birth
D
D
M
M
Y
Y
Y
Y
5. Your address
(Please complete to
enable us to check our
records are correct)
6. Your NIN0.
7. Your Pay Number:
8. Name Of CSAVC
Provider
Scottish Widows
Standard Life
Equitable Life
Please tick relevant box
B. Details of Revised Gross Contribution
I wish to change the level of my regular contribution under the scheme to the percentage/amount shown.
%
of gross pay per month
or
£
Per month
If you wish to switch any or all of your funds you will need to contact your CSAVCS provider direct as this can now be
done over the telephone.
Scottish Widows: 0800 028 4419
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Standard Life: 0800 33 3304
Equitable Life: 0870 607 6791
I authorise you to commence deductions from my salary at the new rate from the next available pay period.
Signed: ………………………………………………………………………………………….
Dated: …………………………………………………………………………………………...
Once you have completed all sections and signed and dated the form please return to:
(To be completed by the APAC before the form is sent to the CSAVC member)
APAC use only
Change form checked
Notify payroll provider of the change and to start
new deductions from the next available pay run
PC272: January 2007
27
Options and AVCs
AVC 3.2 Annex A
3.0 TRANSFERRING MONEY INTO THE CSAVC SCHEME
3.1 Transfer values into the CSAVCS
A transfer value shall only be accepted by the CS AVC Scheme if the person is a member of the
CSPS and the transfer is from either:
i)
a Retirement Benefits Scheme or
ii)
what was (pre A Day) a FSAVC Scheme, which is not an appropriate scheme within
the meaning of the Social Security Act 1986. The member will be required to make
a declaration to that effect.
Following a rule change it is now acceptable for incoming transfers to contain employer
contributions. There are no time limits so the transfer can take place at any time whilst the member
is still in CS employment.
1. The member contacts the APAC to request a transfer. If the transfer is from a pre A Day FSAVC
the member must sign a declaration (Letter 3A) to that effect to allow the transfer to proceed.
2. The APAC contacts the transferring scheme to confirm that they are able to make a transfer
payment, ie check whether the AVCs can be transferred separately should equalisation requirements
not be met on transfer of main scheme benefits. (Letter 3B). Equalisation is not required for
transfer of AVCs or for a pre A Day FSAVC.
3. The APAC confirms whether the transfer can be accepted into the Civil Service AVC scheme.
The APAC obtains a quote from the transferring scheme and issues this to the member. (Letter 3C)
This letter also advises the member to select a new Provider, and provides contact details for the
Providers where appropriate.
4. The member contacts the Providers and makes a selection
5. The Member completes the Provider application form, and returns this to the APAC with
confirmation that they wish to go ahead with the transfer.
6. The APAC raises the cheque from the transferring scheme,(Letter 3D) and sends the cheque
and application form to the new Provider, (Letter 3E)with a covering letter confirming that this
payment is a ‘transfer in’
7. The Provider processes the ‘transfer in’ and issues confirmation by letter to the APAC and
member (Letter 3F) can be used by the APAC to confirm the transfer in to the member if
preferred.
8. Reminder letters to the exporting provider (Letter 3G) and the member (Letter 3H) are
available.
Note:
When transfers between AVC schemes are made and the Providers are the same for both
arrangements, the benefits can be transferred within the relevant organisation thus eliminating the
need to raise a cheque.
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
3.2 Transfers/Switching of AVCs between Equitable Life, Scottish Widows and
Standard Life
1. The member contacts the APAC asking to move his AVC investment to another of the CS AVC
Providers and/or to re-direct future contributions.
2. If the member is not already an investor with his selected Provider under the CS AVC Scheme,
he must request a joining/information pack from the relevant Provider. The contact numbers are on
the change form (see Form 3.1 at the end of this section), however, the APAC can provide the
contact details in advance of the member receiving the change form so that he can request the
joining/information pack immediately. A covering letter (Letter 3J) will be issued with the change
of provider form, which will make it clear that the change of provider form cannot be actioned until
an application form for the new provider has been received.
3. The member completes the ‘Change of Provider’ form (Form 3.1) and the new Providers’
application form and passes these to the relevant APAC.
4. The APAC notifies employer/payroll* of change of provider and any adjustment to contribution
levels, as required. APAC forwards the change form & application form to the new Provider. The
APAC also sends a copy of the change form to the member’s existing Provider for information.
5. Where the member requests the transfer of funds, the existing Provider draws a cheque/ BACS
payment and sends this to the new Provider.
6. The new Provider processes the member’s application and informs the APAC & the member that
the change of provider is complete.
*NOTE: The APAC will notify the payroll directly where this has been agreed with the employer.
Otherwise, the APAC will notify the employer who will instruct their payroll.
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
LETTER 3A – Letter to member who wishes to transfer a pre A day
FSAVC into the CSAVCS
CIVIL SERVICE AVC SCHEME
Dear
Thank you for your recent enquiry where you asked if it was possible to transfer your pension benefits with
(Insert name of provider) into the CSAVCS.
The CSAVCS can only accept benefits from a retirement benefit scheme that was referred to as a FSAVC
prior to the 6 April 2006 as long as it was not an appropriate scheme.
In order for us to proceed with the transfer of your benefits into the CSAVCS we will require you to sign the
declaration at the bottom of this letter and return it to us at the address above.
Once we have your signed declaration we will approach (insert name of provider) to request a transfer of your
benefits into the CSAVCS. We will also ask for confirmation that your FSAVC was not an appropriate scheme.
Yours sincerely
I certify that the arrangement from which the transfer is being made was a Free Standing Additional
Voluntary Contribution Scheme before 6 April 2006.
Name:
Signed:
Dated:
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Letter 3B: Transfer - APAC letter to Exporting Provider
CIVIL SERVICE AVC SCHEME
Our ref
Date
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION SCHEME (CS AVC SCHEME)
NAME:
POLICY NUMBER:
DATE OF BIRTH:
NATIONAL INSURANCE NUMBER:
………… commenced duty with this Department on ………. and has requested a transfer value of their
pension benefits with your scheme into the Civil Service AVC scheme.
The Civil Service AVC scheme is registered under Chapter 2 Part 4 of the Finance Act 2004 and will only
accept transfer payments provided:•
it is from a retirement benefits scheme or
•
from a scheme that was, pre A Day, referred to as a Free Standing Additional Voluntary Contribution
Scheme which was not an appropriate scheme within the meaning of the Social Security Act 1986
Please delete one of the following two paras
I would be grateful if you could let me know whether or not you are prepared to make a transfer payment in
respect of this officer who has signed a statement, copy attached, which states that pre A day they were
contributing to a Free Standing AVC with your scheme. Can you please also confirm that this is not an
appropriate scheme?
I would be grateful if you could let me know whether or not you are prepared to make a transfer payment in
respect of this officer, and confirm that the transfer would be from a retirement benefit scheme.
If a transfer value payment can be made, please advise the amount so that I can obtain illustrations for the
officer.
I look forward to hearing from you.
Yours faithfully
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Letter 3C: Letter to member with Transfer Value
Civil Service AVC Scheme
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION SCHEME (CSAVCS)
(Insert name of provider) have now advised that the current value of the transfer payable is £ (insert amount).
If you would like to go ahead with the transfer, would you please let us know in writing?
I enclose the leaflet The Civil Service Additional Voluntary Contribution Scheme which provides a brief guide to
how you can boost your retirement income, or provide extra life cover by making additional voluntary
contributions to the CSAVCS.
If you decide that you would like to contribute to the CSAVCS you can obtain a joining/information pack by
telephoning the CSAVCS providers as follows:
Scottish Widows’ Fund and Life Assurance Society on 0800 028 4419
Standard Life Assurance Company on 0800 33 33 04
The joining pack will include an application form and other important information. If you wish to proceed, you
should complete the application form and return it to the provider or to us at the above address. If you require
help in completing the application form the providers will be more than happy to assist you. Just contact the
relevant provider on the helpline given above.
If you require any further information please let us know.
Yours sincerely
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
LETTER 3D: Letter to previous provider/department requesting payment
Civil Service AVC Scheme
Dear Sir/Madam
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION SCHEME (CSAVCS)
REFERENCE
Thank you for your calculation of the AVC transfer value payment of £ (insert amount) for (insert member’s
name).
I have confirmation that (insert member’s name) wishes a transfer of his/her AVC benefits to be arranged.
Please send the transfer value payment to the address above, made payable to (insert the name the cheque
should be made payable to) as soon as possible.
Yours sincerely
PC272: January 2007
33
Options and AVCs
AVC 3.2 Annex A
LETTER 3E: Letter to NEW CSAVC Provider with Cheque
Civil Service AVC Scheme
Dear (Insert CSAVC Provider)
Mr/Mrs (insert name) has requested the transfer of his/her pension benefits with (Insert name of exporting
provider) to the CSAVCS.
I enclose a cheque for £ (Insert amount) which Mr/Mrs (Insert name) would like paid into her existing fund/s as
indicated on the attached application form.
Yours sincerely
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Letter 3F: Letter to member confirming transfer.
Civil Service AVC Scheme
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTIONS SCHEME (CSAVCS)
I am writing to confirm that the transfer of your AVC benefits from (Insert previous scheme/provider) has been
completed.
Details of the AVC transfer benefits will be included in future annual statements provided by (enter new
provider’s name).
If you need any further information please let us know.
Yours sincerely
PC272: January 2007
35
Options and AVCs
AVC 3.2 Annex A
Letter 3G: Letter to previous scheme chasing payment
Civil Service AVC Scheme
Dear Sir/Madam
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTIONS SCHEME (CSAVCS)
Reference:
We wrote to you on (insert date of last letter) informing you that (insert member’s name) wishes the transfer of
his/her (insert name of provider) AVC benefits to be arranged. We have not yet received the transfer value
payment.
Please can you send the transfer value payment as soon as possible.
If you need any further information, please let us know.
Yours faithfully
PC272: January 2007
36
Options and AVCs
AVC 3.2 Annex A
LETTER 3H: Letter to member chasing a reply to transfer request.
Civil Service AVC Scheme
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION SCHEME (CSAVCS)
We wrote to you on (insert date), asking you to confirm in writing that you wished to go ahead with your
transfer. We have not received a reply.
Please could you let us know your wishes as soon as possible? We are unable to proceed any further until we
hear from you.
If you need any further information, please let us know.
Yours sincerely
PC272: January 2007
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Options and AVCs
AVC 3.2 Annex A
Letter 3J: Covering letter to member for switching provider
Civil Service AVC scheme
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTIONS SCHEME (CSAVCS)
Thank you for your letter in which you indicate that you wish to change your CSAVCS provider.
In order to do so you will need to complete and return the enclosed change of provider form to the above
address.
If you need any help with completing the form, please let us know.
Yours sincerely
Enc
Change of provider form
PC272: January 2007
38
Options and AVCs
AVC 3.2 Annex A
Form 3.1: Change of Provider
CIVIL SERVICE AVC SCHEME
To be completed by the member to redirect existing contributions and/or switch your existing funds between
Scottish Widows plc and Standard Life Assurance Company or from Equitable Life Assurance Society. It is
essential that you complete all applicable fields accurately. Please use BLOCK capitals.
1.
DETAILS OF MEMBER
Current provider (and scheme number if known)
Full name
Mr / Mrs / Miss / Ms / Other
Date of Birth
____ ____ / ____ ____ / ____ ____
National Insurance Number
(See your payslip for details)
2.
SELECTING A PROVIDER –Scottish Widows or Standard Life
a.
Are you already paying AVC contributions to your
chosen provider –Scottish Widows or Standard Life?
Yes
No
If yes, you do not need to complete an application form.
If no, a joining / information pack must be requested, and the application form(s)
completed for your chosen provider(s) to make future contributions.
The helpline numbers are:
Scottish Widows
0800 028 4419
3.
Standard Life
0800 33 33 04
CHANGE INSTRUCTIONS
Please select one of the following options
a.
Switch all your existing funds and re-direct future contributions
b.
Switch all of your existing funds only
c.
Switch part of your existing funds and re-direct future contributions
d.
Switch part of your existing funds only
e.
Re-direct future contributions only
PC272: January 2007
COMPLETE PARTIAL SWITCH
INSTRUCTIONS BELOW
COMPLETE PARTIAL SWITCH
INSTRUCTIONS BELOW
39
Options and AVCs
AVC 3.2 Annex A
Partial switch instructions (only to be completed if you have selected option c or d)
Please list the funds you want to be switched below:
FUND NAME
% TO BE
SWITCHED
FUND NAME
% TO BE
SWITCHED
You need to choose which provider to redirect future contributions and/or switch your existing
funds to.
4.
AUTHORITY TO CHANGE
New Provider: Scottish Widows / Standard Life (delete as appropriate)
I authorise and request my employing department to act in accordance with the above instructions and any completed
application form(s).
Unless otherwise advised, if you are switching funds they will be invested in the same funds as you have selected in the
application form, or subsequent instruction, for ongoing future contributions.
Signature:
___________________________________________
Date:
___ ___ / ___ ___ /___ ___
PLEASE FORWARD THIS FORM TOGETHER WITH ANY APPLICATION FORMS (WHERE APPLICABLE) TO YOUR
APAC.
Your instructions will be confirmed by your new provider(s) in the near future.
FOR APAC USE ONLY
CHECKLIST
Change form checked?
+
Application form attached?
NB: An application form is required in ALL circumstances unless the member
has answered yes to question 3A.
Send the completed change form to the current provider to release the monies
NB: If members have selected option 2.e, this step is not applicable.
Send a copy of the change form and completed application form (if applicable) to the
new provider(s).
NB: An application form is required in ALL circumstances unless the member
has answered yes to question 3A.
PC272: January 2007
40
Options and AVCs
AVC 3.2 Annex A
4.0 LUMP SUM CONTRIBUTIONS
4.1 Lump sum payments
1. The member contacts the APAC to make a lump sum contribution. APAC issues letter 4A
together with lump sum application form (Form 4.1) See paragraph 3 for ‘Work Flow’ chart giving
process
NB. New members will have to complete an application form from their chosen Provider.
For existing members the APAC should check whether the member is already an investor
with one of the CS AVC Providers. If not, or the member wishes to invest with a different
Provider, they must complete the chosen Provider’s application form (see ‘1.0 New Member
Joining Section’ for contact numbers).
2. The member can choose to make payment through payroll deduction or by cheque.
2a) Payment through payroll:
i)
The member completes the lump sum application form and sends this to their APAC.
ii)
The APAC arranges for the appropriate deduction through employer/payroll, at the
same time copying the form 4.1 to the Provider. The APAC informs the member
(Letter 4B).
NOTE: The APAC will notify the payroll directly where this has been agreed with the employer.
Otherwise, the APAC will notify the employer who will instruct their payroll.
2b) Payment by cheque:
i)
The member completes the lump sum application form and sends it, and a cheque to
the APAC. (cheques made payable to ‘Scottish Widows plc’, ‘Standard Life
Assurance Company’ or ‘The Equitable Life Assurance Society’.
ii)
The APAC informs the member (Letter 4C) and sends the cheque & form 4.1 to the
Provider.
iii)
The Provider applies the cheque and issues written confirmation to the member
(copying in the APAC).
Note:
There is no longer a limit to the total contributions a member can make to their CSAVC by regular
contributions or lump sum payment in any one fiscal year from 6 April. However tax relief will only
be given on contributions up to the member’s gross taxable earnings for that year subject to the
annual allowance. For more information on the annual allowance see Section 1 of Member’s
Benefits. To allow the lump sum to be processed the cheque must be with the Provider by 5th April
to enable the payment to be applied to the members account for that financial year.
If paid by cheque, tax relief cannot be given at source. Members will therefore have to claim tax
relief from their Inspector of Taxes when they make a personal tax return.
PC272: January 2007
41
Options and AVCs
AVC 3.2 Annex A
4.2 Employer Contributions
The rules of the CSAVC Scheme allow Civil Service Employers the option, for example, of
providing the employees with the opportunity to have non-consolidated pay or bonuses paid into a
CSAVC fund. These payments will also be measured against the member’s Annual Allowance but
are not assessed for National Insurance Contributions.
3. Work Flow for Application of Lump Sum Contributions– New & Existing Member
The APAC issues letter (4A)
together with application form
(Form 4.1) to the member.
↓
Member returns form 4.1 with
either cheque or instructions to
deduct a lump from their salary
↓
↓
The APAC instructs the payroll
and sends form 4.1, and the
Provider application form, if
applicable, to the Provider
immediately. If payment is made
by cheque, form 4.1 must be
attached to the cheque, together
with the Provider application form
if applicable. The APAC confirms
action to member (Letter 4B or
Letter 4C as appropriate)
↓
PC272: January 2007
42
Options and AVCs
AVC 3.2 Annex A
Form 4.1: Application for Payment of a Lump Sum Contribution
CIVIL SERVICE AVC SCHEME
A member of the Civil Service AVC Scheme who wishes to make a lump sum payment should complete the application
form in black ink. If you are not a member of the CSAVC Scheme or you wish to invest with a different CSAVC Provider,
you should also complete the application form for the admission of new members. On completion you should return this
form to your APAC (together with the Provider’s application form if you are a new contributor).
Surname:
Other Name(s):
Home Address:
Office Address:
National Insurance Number:
Date of Birth:
Payroll Number:
I wish to pay a single lump sum contribution of £ ____________or
I wish to pay a lump sum of £___________ over _____(enter number of months) at the rate of £ _________ per month
to: (tick one box)
Standard Life Assurance Company
Scottish Widows plc
Equitable Life Assurance Society
□
□
□
Investment Instructions
Your lump sum contribution will be invested in the same proportions as shown on your new members application form.
Instructions to change investment link must be given using the appropriate CHANGE form, which can be obtained from
your Provider.
Authorisation
If the Administrators of the Civil Service AVC Scheme accept my application, I authorise and request my employing
department to deduct from my pay the lump sum contribution specified/ I enclose a cheque for £
made payable
to ‘Scottish Widows plc’, ‘Standard Life Assurance Company’ or ‘The Equitable Life Assurance society’ *
*Delete as applicable. Note: If paying by cheque, member must reclaim tax personally from the HM Revenue and
Customs.
I understand and accept that payroll centres can only accommodate within a pay period, a lump sum contribution up to
an amount not exceeding net monthly salary or weekly wage.
Signature _____________________________________
Date ________________
FOR OFFICE USE
Scheme number:
NI No. Checked.
DOB Checked
Initial:
Date:
PC272: January 2007
43
Options and AVCs
AVC 3.2 Annex A
Letter 4A: Lump Sum Contributions
CIVIL SERVICE AVC SCHEME
Dear
LUMP SUM CONTRIBUTIONS
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION (CSAVC) SCHEME
NATIONAL INSURANCE NUMBER:
Thank you for your enquiry about increasing your pension benefits by making a lump sum payment to the Civil
Service Additional Voluntary Contribution scheme.
Your lump sum contribution can be spread over several months or in one lump sum from your pay.
Contributions are normally made directly from your salary, so that full tax relief can be given at source.
Therefore the amount you contribute within a pay period must not exceed your net monthly salary or weekly
wage.
If, you wish to pay by cheque, you should make your cheque payable to your chosen provider. And enclose it
with completed form 4.1. Please ensure it is returned to this office in good time so that it can be forwarded to
the Provider before the end of the tax year. The cheque must be with the Provider by 5 April for inclusion in
the current tax year. If the Provider does not receive your cheque in time it will be returned to you together
with your application form. You should also be aware that tax relief cannot be given at source when payment
is made by cheque. You will, therefore, have to claim the tax relief direct from your own tax office.
If this is the first time you have contributed to the CSAVC scheme, you must also complete and return the
application form from your chosen Provider together with application form 4.1.
Also enclosed is a death benefit nomination form. If you wish to make a nomination or wish to change an
existing nomination you should complete the form and return it the address at the top of this letter. Please note
that this nomination form is specifically for the CSAVCS and is entirely separate from any nomination you may
have made under the Civil Service pension scheme. (CSPS).
Providers application form(s) and information packs can be obtained on request to the providers by
telephoning their helpline number(s) as follows:
SCOTTISH WIDOWS 0800 028 4419
STANDARD LIFE 0800 333 304
PC272: January 2007
44
Options and AVCs
AVC 3.2 Annex A
If you are an existing contributor (or have made CSAVC contributions in the past and hold a fund with a
Provider and wish to add to that fund) please only complete and return the enclosed application form to me. If
you are paying by cheque, please enclose your cheque with the application form.
Yours sincerely
Enc:
Application form 4.1
Death benefit nomination form 1.1
PC272: January 2007
45
Options and AVCs
AVC 3.2 Annex A
Letter 4B : Confirmation letter to Member ( by payroll deductions)
CIVIL SERVICE AVC SCHEME
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION (CSAVC) SCHEME
NATIONAL INSURANCE NUMBER:
Thank you for your application to contribute to the CSAVCS by lump sum payment.
I can confirm that contributions will be made from your salary in accordance with your instructions. You will
receive tax relief on your contributions but please be aware that all pension contributions are subject to the
Annual Allowance and it is your responsibility to report any pension contributions made over the annual
allowance to HM Revenue and Customs and to pay any tax due.
I enclose a copy of your application form for your records.
Please let us know if you change your address at any time so that we can notify [insert name of provider] and
amend our records.
Yours sincerely
Enc:
Copy of your application form 4.1
Information leaflet IF1
Copy of Application Form
PC272: January 2007
46
Options and AVCs
AVC 3.2 Annex A
Letter 4C : Member Confirmation (payment by cheque)
CIVIL SERVICE AVC SCHEME
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTIONS (CSAVC) SCHEME
APPLICATION CONFIRMATION
NATIONAL INSURANCE NUMBER:
Thank you for your application to contribute to the CSAVCS by lump sum payment. I can confirm that your
cheque(s) for £ (insert amount(s)) has/have been forwarded to your provider. Please note that to claim tax
relief you will need to contact your tax office.
I enclose a copy of your application form for your records.
Please let us know if you change your address at any time so that we can notify [insert name of provider] and
amend our records.
Yours sincerely
Enc: Information leaflet IF 1
Copy of Application Form
PC272: January 2007
47
Options and AVCs
AVC 3.2 Annex A
5.0 MEMBER LEAVING THE SCHEME BEFORE CSAVCS BENEFITS CAN
BE TAKEN
NOTE: From 18 December 2006 a CSAVCS member can draw their AVC benefits from age 55 regardless
of whether or not they have taken their main scheme benefits. Some members who were members of the
Civil Service Pension Scheme before 6 April 2006 and also took out their CSAVC before that date have a
protected right to take their main scheme and CSAVCS benefits independently from age 50. (see Section 5.4)
The CSAVC Scheme was amended following a relaxation by HM Revenue and Customs (HMRC) on 30
June 1999; and as a consequence, staff may treat their CS AVCs independently from their main (CSPS)
scheme benefits. CSAVC funds may be transferred with the main scheme benefits or independently to
another UK pension scheme or arrangement that is registered by HMRC or to a Qualifying Recognised
Overseas Pension Scheme (QROPS). CSAVCS benefits can also be left in the CSAVC Scheme while the
main scheme benefits are transferred.
NB All members have the same transfer out rights regardless of whether they are still serving civil servants
or have left the Civil Service and are deferred members.
1. The APAC should write to member (Letter 5.0) enclosing a ‘Member Leaving Service Before
CSAVCS Benefits Can Be Taken’ form (see Form 5.1).
2. The member completes the ‘Member Leaving Service Before CSAVCS Benefits Can Be Taken’
form and returns the form to the APAC (see Form 5.1).
3. The APAC signs the form and sends it to the relevant Provider(s), following any additional
procedures laid down in Sections 5.1 – 5.4.
Note:
A schedule showing all information which would otherwise be shown on the ‘Member Leaving
Service Before CSAVCS Benefits Can Be Taken’ form can be sent instead.
4. The Provider settles benefits as per the procedures laid down in Sections 5.1 – 5.4.
5. The APAC sends notification to the payroll centre/ employer* to cease deductions from pay.
*NOTE: The APAC will notify the payroll directly where this has been agreed with the employer.
Otherwise, the APAC will notify the employer who will instruct their payroll.
Note for final contributions:
The APAC must ensure all payments have been sent to the Provider(s). If a member resigns or opts
out of CSPS it will not be possible to continue contributions and the Provider(s) can only settle
benefits in respect of contributions they have received to the specified date.
Any contributions received by the Provider after the settlement date will be returned to the APAC.
Any refund of contributions is subject to tax. The APAC must ensure the appropriate tax is deducted
before the refund is made to the member. See section 2.
5.1 Transferring out of the CSAVCS
1. The member selects one of the following options on the ‘Member Leaving Service Before
CSAVCS Benefits Can Be Taken’ form and returns this to the APAC. Options include:
PC272: January 2007
48
Options and AVCs
•
•
AVC 3.2 Annex A
A transfer to a UK registered pension scheme or
A transfer to a QROPS
2. The APAC contacts the new Trustees/Managers or Insurers to issue payment (Letter 5A).
3. The APAC completes the required checks to ensure the transfer out can complete.
4. The APAC sends the completed ‘Member Leaving Service Before CSAVCS Benefits Can Be
Taken’ form (Form 5.1) with an appropriate instruction to the existing AVC Provider.
5. The Provider issues the cheque/ BACS payment to the new scheme Trustees or Insurers with
copy of the ‘Member Leaving Service Before CSAVCS Benefits Can Be Taken’ form.
6. The Provider confirms the transfer of funds to the relevant APAC.
5.2 Surrender Value (Less than 2 years combined service)
Note:
If the member’s qualifying service in the main scheme, together with any service whilst a member of
a previous employer’s pension scheme (from which that transfer value has been paid to this scheme
or to CSPS), totals less than two years, the member can be paid the value of his or her accrued
benefits after deduction of any tax payable by the Minister. If a cash refund is requested the amount
refunded will be the value of the accumulated fund bought by the contributions paid.
Member’s who have had a transfer value paid in from a personal pension or a retirement annuity
contract will not be eligible for a refund of contributions and will be treated the same as someone
who has 2 or more years qualifying service in the main scheme.(5.1)
Members with less than 2 years qualifying service in the main scheme can opt for a transfer out of
the CSAVCS if they prefer.
1. APAC writes to member (Letter 5B(i)) within 2 months of leaving enclosing option form (Form
5.1).
2. The member selects ‘Refund of contributions’ on the ‘Member Leaving Service Before CSAVCS
Benefits Can Be Taken’ form (Form 5.1), and returns the form to the relevant APAC.
3. The APAC forwards the ‘Member Leaving Service Before CSAVCS Benefits Can Be Taken’
form (Form 5.1) to the relevant Provider with instructions for payment.
4. The Provider issues a cheque/ BACS payment in accordance with the instructions from the
APAC.
5. The APAC pays the cheque into their suspense account.
Note:
Any money in respect of Additional Voluntary Contributions must not be paid into the Civil
Superannuation Vote.
PC272: January 2007
49
Options and AVCs
AVC 3.2 Annex A
6. The APAC deducts tax at the appropriate rate (20% - reference IR12 paragraph 17.22) and issues
this to the member’s tax office (Letter 5B(ii)). Note: A covering letter should also be sent giving
details of the member and an explanation of the reason for payment.
7. The APAC sends the remainder of the cheque to the member.
5.3 Benefits Deferred in the Pension Scheme until Retirement
1. The member selects ‘Benefits Deferred in the AVC Scheme’ on the ‘Member Leaving Service
Before CSAVCS Benefits Can Be Taken’ form (Form 5.1), and returns the form to the relevant
APAC.
2. The APAC forwards the ‘Member Leaving Service Before CSAVCS Benefits Can Be Taken’
form (Form 5.1) to the relevant Provider with instructions.
3. The Provider confirms to the APAC in writing the value of the fund and that it will remain
invested in the scheme.
Note:
This will show the present value of the member’s fund.
5. The APAC writes to the member confirming that the fund will remain invested and its current
value (Letter 5C(i)). If the member left on early retirement with an annual compensation
payment (ACP) under classic option A or from the premium or Classic Plus scheme use Letter
5C(ii) if they are under age 55 and do not have a protected right to take their pension
benefits at age 50*
6. CSAVCS benefits must be taken before the member's 75th birthday otherwise they will lose the
right to take any of their benefits as a lump sum.
7. If the member does not contact either the APAC or provider before they reach their 75th birthday
the relevant provider will contact the APAC asking for the APAC to contact the member to
inform them that an annuity from their CSAVC benefits must be set up immediately.
8. The APAC may need to contact Capita Hartshead for an up to date address as the member will
already been in receipt of a Civil Service pension.
9. When a member wishes to take their CSAVCS benefits after deferral APACs should follow the
normal retirement process for deferred members see section 7.3
Note:
The onus will be on members to contact the Provider(s) and APAC to claim their benefits at
retirement in accordance with the scheme rules.
*CSAVCS members can draw their AVC benefits from age 55 but some members who were
members of the Civil Service Pension Scheme before 6 April 2006 and took their CSAVC out
before that date have a protected right to take their main scheme and CSAVCS benefits from age
50.
PC272: January 2007
50
Options and AVCs
AVC 3.2 Annex A
5.4 Leaving the Civil Service AVC Scheme (whilst remaining in the Civil Service)
The APAC should follow the leaving service procedure. A member may cease to be a member of
the scheme at any time before they are eligible to draw their benefits, and will have the same
options as a member who is leaving the Civil Service Pension Scheme (CSPS)
The APAC must notify the Employer/Payroll that contributions to the Provider should be stopped
(Letter 5D).
For further information on this please refer to the scheme rules.
PC272: January 2007
51
Options and AVCs
AVC 3.2 Annex A
Letter 5.0 : Option on leaving AVC Scheme
CIVIL SERVICE AVC SCHEME
APAC address
Member name and address
Your Ref:
Our Ref:
Date:
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION (CSAVC) SCHEME
NATIONAL INSURANCE NUMBER:
I am writing to you about your CSAVC money purchase contract, reference number (Insert number)
taken out with Scottish Widows/Standard Life/Equitable Life.
You will wish to know of the options that are available to you, with regard to your CSAVCs, now that
you intend to leave/have left the Civil Service Pension Scheme (CSPS) arrangements.
As you have more than two years’ qualifying service in the scheme you are entitled to a deferred
pension from the CSPS for payment at pension age. You may also preserve your CSAVC fund,
which will remain invested as instructed, with Scottish Widows/Standard Life/Equitable Life. You
will be able to apply for payment of your CSAVC benefits when you reach age 55. Some
members have the right to draw their AVC from age 50. If you were in service before 6 April 2006
and took out your AVC before that date this may apply to you. If you contact us at the above
address we will be able to confirm whether you can take your CSAVC from age 50 or 55. .
You also have the option to defer taking your CSAVC up to the day before your 75th birthday.
Please be aware that you must contact this office at least 2 months before you reach age 75 to give
us and your chosen provider time to settle your benefits before you reach your 75th birthday. Once
you reach age 75 you will not be able to take any of your CSAVC as a tax free lump sum. If, when
you reach pension age you wish to defer taking your annuity you must complete a deferral form
which you can obtain from this office.
If you are taking your CSAVC benefits before you reach main scheme pension age, you may incur
an early withdrawal penalty. This will depend on your Provider and the type of investment you have
chosen and circumstances at the time of withdrawal. For more information contact your provider on
their dedicated helpline.
However, if you become ill and it is confirmed that your illness would have led to ill-health retirement
had you still been in service, you may bring your CSAVC into payment immediately subject to
appropriate medical evidence. If this occurs, please contact this office so that annuity illustrations can
be obtained from your Provider. It may also be possible, in certain circumstances, to access your
main scheme (CSPS) benefits. Your pension administrator will be able to advise you on this.
PC272: January 2007
52
Options and AVCs
AVC 3.2 Annex A
You can also transfer your CSAVCS benefits out to a UK registered pension scheme or to a
Qualifying Recognised Overseas Pension Scheme. You do not have to transfer your CSAVC if you
move to a new employer, but can leave the fund deferred with the CSAVC Provider if you wish.
However, once you have transferred your CSAVC fund out of the CSAVC Scheme you will only be
able to transfer it back into the CSAVCS in certain circumstances if you take up further civil service
employment at a later date and are covered by the CSPS.
Please let me know which option you wish to make by completing and returning the enclosed form
(Form 5.1) as soon as possible in the enclosed envelope.
Yours sincerely
Enclosure:
PC272: January 2007
Form 5.1
Addressed envelope
53
Options and AVCs
AVC 3.2 Annex A
Form 5.1: Member Leaving Service Before Retirement
CIVIL SERVICE AVC SCHEME
SECTION A: For completion by member
APAC
To:
Full name of member
Home Address of member
National Insurance number
Date of leaving/fund transfer
Date of final contribution
Instructions to the Provider:
I am (tick one box only):
LEAVING SERVICE
LEAVING CSAVC SCHEME AND CIVIL SERVICE PENSION SCHEME
STOPPING CONTRIBUTIONS TO CSAVCS
…
…
…
Please select one of the following options (tick one box only)
(a)
(b)
(c)
(d)
Refund of contributions
Benefits deferred in the CSAVCS
Transfer to a registered pension scheme
Transfer to a QROPS
…
…
…
…
Member’s Signature
PC272: January 2007
54
Options and AVCs
AVC 3.2 Annex A
SECTION B: For APAC use only
Employer
Scheme number
APAC CONTACT - Please provide details
Name
Address
Telephone no.
Signature
(administrator) for and on behalf of Cabinet Office
Date
Name and address for cheque if option a, c or d, is selected.
Name
Address
PC272: January 2007
55
Options and AVCs
AVC 3.2 Annex A
Letter 5A: Transfer of AVC to New Employer/Pension Scheme
CIVIL SERVICE AVC SCHEME
APAC address
Your Ref:
Our Ref:
Date:
New employer Address
Dear Sirs
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION (CSAVC) SCHEME
TRANSFER VALUE ENQUIRY
MEMBER:
NATIONAL INSURANCE NUMBER:
The above-named former member of the Civil Service AVC Scheme has requested a transfer value
of his/her accumulated CSAVCS contributions to your pension scheme.
In order for us to complete the transfer arrangements please can you let me have BACS details or
details to whom the cheque should be made payable. I will then make the necessary payment
arrangements with Scottish Widows/Standard Life/Equitable Life.
An early response would be appreciated.
Yours faithfully
PC272: January 2007
56
Options and AVCs
AVC 3.2 Annex A
Letter 5B(i) : Member leaving scheme (less than 2 years service)
CIVIL SERVICE AVC SCHEME
Members name and address
APAC address
Your Ref:
Our Ref:
Date:
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION (CSAVC) SCHEME
NATIONAL INSURANCE NUMBER:
I am writing to you about your AVC money purchase contract, reference number _______________
taken out with Scottish Widows/Standard Life/Equitable Life.
You will wish to know of the options that are available to you, with regard to your AVCs, as you are
leaving/have left civil service employment.
As you have less than two years' service in the main civil service pension scheme (CSPS),
including any transfer value paid in from a previous employer's pension scheme, you can if you
wish have the value of your AVCs returned to you, less a deduction at 20% for Income Tax.
You can also transfer your CSAVCS benefits out to a UK registered pension scheme or to a
Qualifying Recognised Overseas Pension Scheme (QROPS).
Please let me know which option you want to take by completing and returning the enclosed form
(Form 5.1) as soon as possible in the enclosed envelope.
Yours sincerely
Enclosure:
PC272: January 2007
Form 5.1
Addressed envelope
57
Options and AVCs
AVC 3.2 Annex A
Letter 5B(ii) : APAC notification to HMRC (Member less than 2
years service)
CIVIL SERVICE AVC SCHEME
APAC address
Your Ref:
Our Ref:
Date:
HMRC Office
Dear Sirs
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION (CSAVC) SCHEME
MEMBER:
NATIONAL INSURANCE NUMBER:
The above named former member of the Civil Service Pension Scheme (CSPS) was a contributor
to the Civil Service AVC (money purchase) Scheme administered by Equitable Life/Scottish
Widows/Standard Life. As a result of his/her resignation/withdrawal from the scheme before
qualifying for a civil service pension a refund of his/her contributions has been made as follows:
Gross refund (including
growth/interest)
£
Less Income Tax @ 20%
£
________
Net refund
£
A payable order for the income tax deduction made is enclosed.
Yours faithfully
Enclosure:
PC272: January 2007
58
Options and AVCs
AVC 3.2 Annex A
Letter 5C(i) : Member defers benefits in scheme
CIVIL SERVICE AVC SCHEME
APAC address
Your Ref:
Our Ref:
Date:
Member address
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION (CSAVC) SCHEME
NATIONAL INSURANCE NUMBER:
Thank you for returning the completed option form indicating that you wish to preserve your benefits
in the CSAVC Scheme until retirement.
Scottish Widows/Standard Life/ Equitable Life (the Provider) has confirmed that the fund will remain
invested and that its current value is £……..
After the end of each financial year, around May/June, the Provider will issue an annual statement
detailing the current value of your CSAVC fund. The statement will be sent to your home address .
It is important, therefore, that you let us or your Provider know of any change of address.
You can take your CSAVCS benefits at any time from age 55 (you may be eligible to take your
CSAVC benefits from age 50 if you were in service before 6 April 2006 and your CSAVCS
contributions also started before that date). You should apply to this office if you would like to take
your CSAVCS benefits and we will arrange for annuity illustrations to be sent to you.
Please be aware that if you draw your CSAVCS benefits before the main scheme pension age you
may incur an early withdrawal penalty. This will depend on your Provider and the type of investment
you have chosen and circumstances at the time of withdrawal. For more information contact your
provider on their dedicated helpline.
You can also apply to take your CSAVC benefits at the same time as you apply to Capita Hartshead
for payment of your preserved Civil Service pension. You should contact this office with regard to
your CSAVC annuity illustrations.
You may, however, opt to defer taking your annuity at any time from pension age up to the day
before you reach age 75. If you wish to do this you must contact us when your civil service pension
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comes into payment so that you can complete a deferral form. A copy of your completed form will
then be sent to the Provider for their records. You must apply to this office at least 2 months before
your 75th birthday otherwise you will be unable to take any of your CSAVCS fund as a tax free lump
sum.
Please note that it is your responsibility to notify this office to arrange deferral or payment of your
annuity.
In any future correspondence please quote the above reference and National Insurance number.
Yours sincerely
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Letter 5C(ii) : Member left with ACP under CSPS classic
CIVIL SERVICE AVC SCHEME
APAC Address
Your Ref:
Our Ref:
Date:
Member address
Dear
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION (CSAVC) SCHEME
NATIONAL INSURANCE NUMBER:
Thank you for returning the completed option form indicating that you wish to preserve your benefits
in the CS AVC Scheme.
Scottish Widows/Standard Life/Equitable Life (the Provider) has confirmed that the fund will remain
invested and that its current value is £………
You are probably aware that although you have been awarded an Annual Compensation Payment
(ACP), payable immediately, this payment is not a pension and therefore you cannot take your CS
AVCs benefits until you reach age 55. However, if you become ill and it is confirmed that your illness
would have led to ill-health retirement had you still been in service, you may bring your ACP will be
converted into pension, and you may wish to take your AVCs at the same time. If this occurs, please
contact this office so that annuity illustrations can be obtained from your Provider.
You may, however, opt to defer taking your annuity at any time from pension age up to the day
before you reach age 75. If you wish to do this you must contact us when you reach pension age so
that you can complete a deferral form. A copy of your completed form will then be sent to the
Provider for their records. When you wish to draw your CSAVC benefits you should apply to this
office for a benefit illustration. You must apply to this office at least 2 months before you reach your
75th birthday this will enable us to make the necessary arrangement for the payment of your
CSAVCs. If you do not take your CSAVCS benefits before you reach age 75 you will not be able to
take any part of your fund as a lump sum.
Please note that it is your responsibility to notify this office to arrange deferral or payment of your
CSAVC benefits.
An annual benefit statement, detailing the current value of your AVC fund, will be issued by the
Provider after the Scheme anniversary date each year (6 April). The statement will be sent to your
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home address. It is important, therefore, that you inform both the Provider and ourselves of any
change of address.
In any future correspondence please quote the above reference and your National Insurance
number for ease of reference.
Yours sincerely
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Letter 5D : Notification to Employer/Payroll of Cessation of
Contributions
CIVIL SERVICE AVC SCHEME
APAC address
Your Ref
Our Ref
Date
Employer/Payroll Provider
Dear
CIVIL SERVICE AVC SCHEME – CESSATION OF CONTRIBUTIONS
Members Name………………………………………..
National Insurance Number ……………………………..
Staff/Pay number (if known)…………………………….
The above named member of your staff has left the Civil Service pension scheme (CSPS). Our records show
that he/she was also contributing to a Civil Service AVC fund with Scottish Widows/Standard Life/Equitable
Life.
As he/she has left the main pension scheme he/she can no longer contribute to a CSAVC fund. Direct
contributions from pay must therefore stop from [enter date member left main scheme]. Any contributions
already collected should be forwarded to the CSAVC provider in accordance with current procedures.
Yours sincerely
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6.0 DEATH IN SERVICE
Note:
The Providers can only settle benefits in respect of contributions they have received to a specified
date.
1. The dependants inform the employer/ relevant APAC of the death of the member.
2. The APAC advises the Provider immediately of the death of the member (by telephone in the
first instance).
3. APAC writes to the spouse/civil partner/nominee (Letter 6A ) to obtain a copy of death
certificate. And proof of identity if nominee NB this may already be with the section dealing
with the main CSPS benefits on ‘death in service’. APACs must check with section before
writing to beneficiaries.
4. Following a death in deferment the spouse or civil partner will have the choice of taking a
refund of the CSAVC fund value or setting up an annuity with the CSAVC provider or take an
OMO (Letter 6B). If a refund is taken the LTA % will need to be given on the total fund value.
5. The APAC identifies the benefits payable on death in service that are described in the scheme
rules. The APAC should refer to these in the first instance.
6. The APAC consults their records to establish whether the member completed a CSAVC ‘Death
Benefit Nomination’ form (Form 1.1).
7. The APAC completes a ‘Death of a Member’ form (Form 6.1) and issues this to the relevant
Provider(s) along with a copy of the death certificate certified by the APAC. (This is required
before payment can be made).
8. The Provider settles the benefits, in accordance with the instructions of the APAC
9. If the APAC receives the payment, it must be paid into a suspense account (NOT to the Civil
Superannuation Vote). The APAC will pay the appropriate amounts to the nominee or personal
representative.
10. The Death Benefit is an uncrystallised fund but the payment of the fund is a crystallisation event
and therefore the APAC will need to give the LTA% to the recipient. It will not be for the
APAC or CSP to test the death benefit against the members LTA. (Letter 6C)
11. If a CSAVC member dies within the guarantee period after taking an annuity the remainder of
the guarantee period will be paid as a lump sum unless the member is age 75 or over at date of
death. It will then be paid as an annuity.
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AVC 3.2 Annex A
Form 6.1: Death of a Member
CIVIL SERVICE AVC SCHEME
To:
SCOTTISH WIDOWS/ STANDARD LIFE/EQUITABLE LIFE*
From (APAC):
1. DETAILS
Scheme number:
Full name of member:
National Insurance number:
Date of death:
Please attach a copy of the death certificate
Instructions to the Provider
2. TYPE OF BENEFITS
Please arrange payment of the benefits as follows:
LUMP SUM – The cheque/ BACS payment for the lump sum should be made payable to (enter
employing department or nominee):
3. APAC CONTACT DETAILS
Please enter name and address to whom the cheque should be sent or BACS details
Tel. No:
Signature
(administrator) for and on behalf of the Minister
Date
* delete as applicable
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AVC 3.2 Annex A
Letter 6A: Letter to Nominee following death of a CSAVCS member.
Civil Service AVC Scheme
Dear
Civil Service Additional Voluntary Contribution Scheme (CSAVCS)
I am very sorry to learn of the death of (Insert name)
I am writing to inform you that (Insert nominees name) has been nominated to receive a death benefit from
Scottish Widows/Standard Life/Equitable Life in respect of the members CSAVCS.
Before payment can be made I need to confirm that you are the nominee and ask if you would forward a
photocopy of your birth certificate or a photocopy of your passport.
On receipt I will ask the CSAVC provider to raise a cheque made payable to you which I will forward on to you
at the above address.
Yours sincerely
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Letter 6B: Letter to partner of deceased deferred CSAVC member
Civil Service AVC Scheme
Dear
Civil Service Additional Voluntary Contribution Scheme
I am very sorry to hear about the death of (Insert member’s name) and offer my sincere condolences.
As you may be aware (Insert member’s name) paid contributions into the CSAVCS. The rules of the scheme
allow you as the widow/widower/civil partner to either take a refund of the contributions from the CSAVCS
which currently stands at £ (insert amount) or to purchase a pension for yourself.
I enclose illustrations from (Insert name of provider) for you to consider. You have the choice of accepting one
of the illustrations given or to consider purchasing a pension from another company which will be termed an
Open Market Option (OMO).
You may wish to discuss this matter with an independent financial adviser.
Once you have made your choice will you please let us know in writing (enclosing a copy of the death
certificate)? If you decide to take an OMO will you also complete the enclosed form and we can arrange for
(insert name of CSAVC provider) to make payment to the new provider.
Yours sincerely
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Letter 6C: Cover letter with Cheque to Nominee
Civil Service AVC Scheme
Dear
I enclose a cheque from Scottish Widows/Standard Life/Equitable Life for £ (Insert amount) in respect of the
Civil Service Additional Voluntary Contribution Scheme (CSVACS) fund of (insert name of deceased)
(deceased).
I enclose a Lifetime Allowance certificate which gives the total amount of the lump sum being paid and the
percentage of Lifetime Allowance this represents. This information will be needed by the person who is
administering the estate of (insert name of deceased) (deceased).
If you are not administering the estate please pass the enclosed statement and leaflet “Death benefits and tax;
A guide for personal representatives” to the person doing so.
Yours sincerely
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7.0 RETIREMENT SECTION
1. From 18 December 2006 a member can draw their CSAVCS benefits from age 55 (although
some members who were in service and took out their CSAVC before 6 April 2006 can take their
benefits from age 50). It is up to the APAC to make sure that any member who asks to take their
CSAVCS benefits between the age of 50 and 55 has a protected right to do so.
2
Prior to 18 December 2006 CSAVCs could only be brought into payment when the main
scheme pension became payable. Members were therefore able to take their CSAVC benefits at
the same time as their main scheme benefits became payable in the following circumstances:a) on age retirement
b) on actuarial retirement
c) on approved retirement
d) on ill-health retirement
e) classic members who leave on compulsory or flexible retirement if they take their pension
benefits under option (a). This option requires the member to take their pension benefits
immediately.
NB Premium members and classic members who leave under option (b) on CER/FER terms
cannot take their CSAVC on leaving the service if they have not reached age 55 unless they
have a protected right in the scheme to take their benefits at age 50. (See section 5)
3
When a CSAVCS member asks to take their AVC benefits before their main scheme benefits
become payable the normal retirement process should be followed as it is still a crystallisation
event. The normal retirement letters should be used except when sending out Form 7.1 New
Letter 7AE should be used instead of letter 7A. The member will also need to complete the
PDF (Form F7.6). New Letter 7.BE should be used to send the illustration to the member
instead of letter 7B.
4
If a CSAVCS member asks to draw their AVC benefits at age 50 or before age 55 and they do
not have a protected right in the main scheme to do so (i.e. they were not in the main scheme on
6 April 2006 or had not taken their CSAVC out until after that date) please use Letter 7AN
which tells them they must wait until age 55 before applying again.
5
If the member has not drawn their CSAVC before retirement about 3 months before they are
due to retire they will receive a quotation of their main scheme benefits and will be asked to
complete a Personal Details Form (PDF). There are questions on the PDF regarding the
member’s CSAVCs.
6
If the member has CSAVCs they should have indicated on the PDF if they want to take their
CSAVCs at the same time as their main scheme benefits and if so in what order. They should
also have given the approximate fund value of their CSAVC from their last benefit statement.
7
The APAC should use the High Earner spreadsheet to calculate the LTA percentage taken up by
their CSAVC fund. This will only be an estimated LTA at this stage but it will enable the
APAC to see if the member is likely to be close to, or likely to exceed the LTA. If the member
is likely to be over the LTA or has enhanced or primary protection you will need to follow the
steps in section 7 Annex 1
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8
If the member is not likely to exceed the LTA when taking their CSAVC benefits the APAC
will send out (Letter 7A) which gives the member the options available to them regarding their
CSAVC.
The member has 3 options:
•
•
•
•
to take their CSAVCS benefits from one of the CS AVC Scheme Providers in the
form of an annuity and if they wish up to 25% of their fund or 25% of their
remaining LTA if lower as a tax free lump sum) (see 7.1)
Take an Open Market option (see 7.2)
Defer taking their annuity until a future date, although benefits must be taken by the
day preceding the members 75th birthday (see 7.3)
NB the member will lose the right to a tax free lump sum if the CSAVC benefits are
not taken before he reaches age 75.
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7.1 Option A: Purchasing an annuity from the Provider
1. APACS will also enclose a Retirement illustration request form (Form 7.1) this will ask the
member what % of benefits they would like to take as a tax free lump sum up to a maximum of
25%.
Note:
If the Provider is not informed within 3 months of NRD that the member is taking benefits/
deferring, it will be assumed that the member has deferred and monies will continue to be invested
in the member’s chosen fund/s.
2. The member completes the Retirement Illustration request and returns this to the APAC. The
APAC sends it on to the provider after completing section B on Form 7.1.
3. The Provider sends the relevant illustrations to the APAC with an estimated LTA% or fund
value. The APAC calculates the estimated LTA if necessary using the High Earners
spreadsheet neither the illustrations nor the estimated LTA% are guaranteed.
4. The APAC sends the illustrations (Letter 7B) to the member with the estimated LTA%
together with Forms 7.2, 7.3 ,7.4 and 7.5.
5. The member can either decide to :
•
•
•
Defer taking their benefits and completes Form 7.3
To take an Open Market Option and completes Form 7.2 and pay details form (7.5) if
the member wants to take a lump sum before setting up an annuity with the new
provider.
To take an annuity with the CSAVC provider completes Form 7.4 and pay details form
(7.5).
6. If the member decides to take an annuity with the CSAVC provider, the APAC will send on
the information to the Provider who in turn will pay any lump sum to the member’s bank
account and sets up the annuity forwarding confirmation to the APAC. The provider will
confirm to the APAC the fund value and the annuity details and in some cases the LTA%. If
the LTA% is not given the APAC will need to use the High Earner Spreadsheet to calculate
the LTA%.
7. The APAC will complete a LTA certificate this will be available on the High Earner
spreadsheet and will be populated automatically from the information input by the APAC to
calculate the LTA.
8. The APAC will confirm details of the lump sum already paid and details of the annuity to the
member (received from the provider) together with the LTA certificate. (Letter 7.C)
9. APACS should keep a copy of the LTA certificate for their records and a copy should be sent
to the provider. (Letter 7D)
7.1a If the CSAVC fund takes the member close to or over the LTA.
1. If there is a possibility that the member will or could exceed the LTA, or they have enhanced or
primary protection the APAC must notify Cabinet Office, Civil Service Pensions at once by
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emailing the AVC mailbox at avcs@cabinet-office.x.gsi.gov.uk. The APAC must explain that
they have a member who is likely to exceed the LTA giving the following member details
• name
• retirement date
• whether the member has primary or enhanced protection and if so details
• and indicating they are likely to exceed the LTA.
A copy of the PDF must also be copied to Civil Service Pensions.
2. CSP will liaise with the provider, the APAC and the member and help and advise the APAC to
complete the CSAVC process for the High Earner.
3. The Cabinet Office as administrators of the CSAVCS is responsible for paying the tax to HMRC
on any part of the CSAVCS fund that is over the LTA. It is therefore extremely important that
Cabinet Office is made aware of these cases as soon as possible.
4. APACs will liaise with CSP on all High Earners.
5. Once the member’s instructions have been followed and the tax deducted the provider will notify
Cabinet Office in writing. Cabinet Office will confirm details to the APAC and make sure they have
the necessary information to issue the LTA certificate. The LTA certificate must be calculated on
the total amount of the CSAVC fund.
6. A copy must be sent to the provider in the normal way. and a copy should be sent to CSP for
their records.
7.2 Option B: Open Market Option
1. An ‘Open Market Option’ is when a member purchases an annuity from an insurer other than the
named Providers for the Civil Service AVC Scheme. It is for the member to arrange for
illustrations from insurers on the Open Market.
2. Members can still take up to 25% as a lump sum but this will be paid by the CSAVC provider
before the remainder of the fund is transferred to the new provider to set up an annuity for the
member. The CSAVC provider will therefore require the member’s bank details.
The member may choose to purchase an annuity from another Insurer provided the company is
either:
•
A Society registered as a friendly society under Section 7(1)(a) of the Friendly Societies Act
1974 or Section 1(1)(a) of the Friendly Societies Act (NI) 1970; or
•
A UK branch or office of an insurance company to which part II of the Insurance Company Act
1982 applies and which is authorised by or under Section 3 or 4 of that Act to carry on ordinary
long term insurance business as defined in that Act.
3. The member will first need to complete Form 7.1 so that a fund value and illustrations can be
requested from their CS AVC Provider.
4. When the member chooses a Provider for the Open Market option, the member must also
complete and return the Open Market option form (see Form 7.2) to the APAC, together with the
relevant illustration from their chosen external Provider.
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5. If the member wants to take part of the fund as a lump sum the CSAVC provider will pay the
lump sum to the member before the remainder of the fund is sent by BACS or cheque to the new
insurer as per the APAC’s instructions. The member will therefore need to fill in Pay Detail Form
(Form 7.5). The provider will confirm to the APAC the fund value, the payment of any lump sum,
and confirmation that the money has been sent to the new provider. The APAC will confirm these
details to the member and issue the member with an LTA certificate. (Letter 7.C)
6. The APAC will need to keep a copy of the LTA certificate for their records and send a copy to
the new provider. The CSAVC provider does not require a copy. (Letter 7D)
Note If by taking their CSAVC the member could exceed the LTA the tax due will be deducted
before the money is transferred to the new provider APACS will need to follow the previous
instructions at 7.1a
7.3 Option C: Defer Purchasing CSAVC Benefits
1. Since 30 June 1999 members may elect to defer purchasing an annuity until any time up to the
day before their 75th birthday. The actual decision to defer must be made at retirement and notified
to the relevant APAC. The member must complete the ‘Deferred Annuity Purchase’ form (Form
7.3). The APAC will send a copy of the deferral form to the Provider to confirm that benefits are
deferred.
2. If a member takes their main scheme benefits and does not take their CSAVC benefits nor do
they sign a deferral form. (Form 7.3) It will be assumed by the APAC and Provider that the
member has deferred and monies will continue to be invested.
3. At the point the member elects to take their Civil Service AVC benefits, the normal retirement
route should be followed. There are specific letters for deferred members the first letter to go out
with Form 7.1 is Letter 7E. They will also need to complete an additional PDF (Form F 7.6) to
ask what other pension benefits they may have and any crystallization events that may be happening
around the same time as their CSAVC benefits come into payment.
4. There are specific letters for deferred members. APACs should use (Letter 7F) to send
illustration to member.
5. Any High Earner with enhanced or primary protection or any who are likely to exceed the
Lifetime Allowance must be referred to CO, CSP as described in section 7.1a.
4. If a member dies within the guarantee period after setting up an annuity and is age 75 or over the
remainder of the guarantee period will not be able to be paid to the nominee in the form of a lump
sum and will therefore be paid as an annuity.
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AVC 3.2 Annex A
Letter 7A : Member Retiring
CIVIL SERVICE AVC SCHEME
Ref:
Date:
Dear
Civil Service Additional Voluntary Contribution (CS AVC) Scheme
I am writing to you about your CSAVCS investments now that you are retiring on (insert last day of service).
Delete this para as necessary
Although you have indicated on your Personal Details Form that you wish to take your CSAVCS benefits at the
same time as your main scheme benefits you need to be aware of all the options available to you at this time.
Your main Civil Service pension scheme benefits will become payable on your retirement but you do not have
to take your CSAVCS benefits at the same time.
You can if you wish take up to 25% of your CSAVC fund as a tax free lump sum, subject to the Lifetime
Allowance, and the remainder of your fund will be used to set up an annuity (pension).
There are now three options open to you:
•
to defer taking you CSAVCS benefits up to a date no later than the day before your 75th
birthday; You should be aware that if you have a with profits investment with Scottish Widows you
may have a Market Value Adjustment applied to your with-profit fund if you do not take your CSAVC at
normal scheme pension age. (This is normally 60 in the Civil Service) Scottish Widows will be able to
advise you of the steps you can take to avoid this happening by phoning them on their helpline
number 0800 0284419 before you reach normal pension age.
•
to purchase an annuity (pension) from one of the CSAVCS providers taking a tax free lump
sum if required. If you choose this option the benefits you elected for will be paid by the Minister for
the Civil Service in the unlikely event of non-payment by the financial institution.
•
to purchase an annuity (pension) on the open market. (i.e. not with one of the CSAVCS providers).
This option will discharge any liability of the Minister for the Civil Service to pay benefits under the
CSAVCS to, or in respect of, you. You will still be able to take a lump sum but this will be paid by the
CSAVC provider before the remainder of your CSAVC fund is passed to your new provider.
We can arrange for illustrations from the CSAVCS Providers for you but it is for you to arrange for illustrations
from insurers on the Open Market. If you wish to receive annuity illustrations from one of the CSAVC
Providers or wish to obtain a fund value so that you can obtain illustrations on the Open Market, please
complete and return the enclosed form (Form 7.1) to the above address.
As we are not authorised to provide you with advice on investment routes open to you, you may want to seek
your own independent financial advice.
I am enclosing a copy of your death benefit nomination form. Can you please confirm that this nomination is
correct? If you wish to change your nomination please complete and return the enclosed form 1.1. Please
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AVC 3.2 Annex A
note that this nomination form is specifically for the CSAVC scheme and is entirely separate from any
nomination you may have made under the main scheme pension arrangements (CSPS).
I enclose a pre-paid return envelope for your use.
Yours sincerely
Enclosure:
Form 7.1
Form 1.1
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NEW
Letter 7AE : Member drawing benefits before Retirement
CIVIL SERVICE AVC SCHEME
Ref:
Date:
Dear
Civil Service Additional Voluntary Contribution (CS AVC) Scheme
Thank you for your recent enquiry regarding your CSAVCS where you indicated that you are considering
drawing your CSAVCS benefits.
From 18 December 2006 all CSAVCS members have the right to draw their CSAVCS benefits from age 55
regardless of whether or not they are receiving their main scheme pension benefits.
Delete paragraph as necessary
Some members also have a protected right to take their CSAVCS benefits from age 50. After checking your
service records I can confirm that as you were in service and took out your CSAVC before 6 April 2006 you
can draw your CSAVCS benefits from age 50.
You can if you wish take up to 25% of your CSAVC fund as a tax free sump sum, subject to the Lifetime
Allowance, and the remainder of your fund will be used to set up an annuity.
You also have various options open to you:
•
to purchase an annuity (pension) from one of the CSAVCS providers taking a tax free lump
sum if required. If you choose this option the benefits you elected for will be paid by the Minister for
the Civil Service in the unlikely event of non-payment by the financial institution.
•
to purchase an annuity (pension) on the open market. (i.e. not with one of the CSAVCS providers).
This option will discharge any liability of the Minister for the Civil Service to pay benefits under the
CSAVCS to, or in respect of, you. You will still be able to take a lump sum but this will be paid by the
CSAVC provider before the remainder of your CSAVC fund is passed to your new provider.
We can arrange for illustrations from the CSAVCS Providers for you but it is for you to arrange for illustrations
from insurers on the Open Market. If you wish to receive annuity illustrations from one of the CSAVC
Providers or wish to obtain a fund value so that you can obtain illustrations on the Open Market, please
complete and return the enclosed form (Form 7.1) to the above address.
As we are not authorised to provide you with advice on investment routes open to you, you may want to seek
your own independent financial advice.
If you do decide to draw your CSAVCS scheme benefits before normal scheme pension age, you may incur an
early withdrawal penalty. This will depend on your provider and the type of investment you have chosen and
circumstances at the time of withdrawal. For more information contact your provider on their dedicated
helpline.
I am enclosing a copy of your death benefit nomination form. Can you please confirm that this nomination is
correct? If you wish to change your nomination please complete and return the enclosed form 1.1. Please
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note that this nomination form is specifically for the CSAVC scheme and is entirely separate from any
nomination you may have made under the main scheme pension arrangements (CSPS).
I am also enclosing a Personal Details Form which will give us the necessary information we will need to
proceed. Please complete and return this form in the pre-paid return envelope we have provided for your use.
Yours sincerely
Enclosure:
Form 7.1
Form 1.1
Personal Details Form
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NEW
Letter 7AN : Member requests drawing benefits before Retirement at age
50 but not eligible until 55
CIVIL SERVICE AVC SCHEME
Dear
Ref:
Date:
Civil Service Additional Voluntary Contribution (CS AVC) Scheme
Thank you for your recent enquiry regarding your CSAVCS when you indicated that you are considering
drawing your CSAVCS benefits.
From 18 December 2006 all CSAVCS members have the right to draw their CSAVCS benefits from age 55
regardless of whether or not they are receiving their main scheme pension benefits.
Delete paragraph as necessary
Some members also have a protected right to take their CSAVCS benefits from age 50. After checking your
service records I am afraid that as you were not in service before 6 April 2006 you do not have a protected
right in the scheme to draw your benefits from age 50 and will therefore have to wait until you reach age 55
when you will be able to apply again.
Delete paragraph as necessary
Some members also have a protected right to take their CSAVCS benefits from age 50. After checking your
service records I am afraid that as you did not take out your CSAVC until after 6 April 2006 you do not have a
protected right in the scheme to draw your benefits from age 50 and will therefore have to wait until you reach
age 55 when you will be able to apply again.
I am sorry I am unable to help at this time.
Yours sincerely
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AVC 3.2 Annex A
CIVIL SERVICE ADDITIONAL VOLUNTARY CONTRIBUTION SCHEME (CSAVCS)
Form 7.1: Retirement Illustration Request
To obtain illustrations, please complete Section A of this form and pass it to your APAC. The APAC will complete
Section B and pass your request to the relevant provider. Please complete all applicable areas in BLOCK
CAPITALS.
When you draw your additional voluntary contribution fund you can take up to 25% of your fund as a lump sum
which will be tax free as long as your benefits do not exceed the Lifetime Allowance. The remainder of your fund will
then be used to provide you with a pension to suit your individual needs. The notes overleaf explain the various
options available. You will normally receive two illustrations as a result of completing this form. These will closely
mirror the benefits available from the Civil Service pension scheme, ie the illustrations will assume a five year
guaranteed period with, if you are married or are in a civil partnership, a 50% spouse/partner pension. One
illustration will assume a level pension, whilst the other will assume that pension payments will increase in line with
the Retail Price Index. If you would like additional illustrations on alternative bases please give the relevant details in
the panel below.
Additional Illustrations
I would like the following additional illustration/s
Please indicate in the box below if you would like your illustrations to include a lump sum and if so the percentage up
to a maximum of 25% of your CSAVC fund.
LUMP SUM
I would like
my illustrations
to show a
lump sum of
To:
%
APAC
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Section A – To be completed by the member
Title (Mr/Mrs etc)
Surname
Forename(s)
Date of Birth
Male or female
Date of retirement
National insurance number
Spouse/civil partner’s date of birth
Note if no spouse/civil partner’s date of birth is shown above, we will assume that you do not want us to
quote benefits for a spouse/civil partner
Member’s address
Postcode
Section B – To be completed by the APAC
APAC ADDRESS
Postcode
Date of taking PCSPS benefits
Date of taking AVCs following deferral
Pensions in payment – you can arrange for your pension to be paid at a fixed level. Alternatively, to protect the purchasing
power of your pension, you can arrange for it to vary in line with changes in the Retail Price Index (also known as an index-linked
pension) or to increase at a fixed rate of 3%.
Guaranteed period – pensions are paid for your lifetime. You can, however, arrange a pension where your pension payments
are guaranteed to continue during your lifetime for a selected number of years (up to 10 years but usually for 5 or 10 years)
should you die during that time.
Dependant’s pension – at retirement, provision may be made for a pension to continue throughout the lifetime of your
spouse/civil partner or other dependant. You may also select the level of pension to be paid to your dependant from the date of
your death as a proportion of your own pension.
Open market option – your pension may be purchased from Scottish Widows plc, The Equitable Life Assurance Society,
Standard Life Assurance Company or any other life insurance company of your choice. The total fund value quoted on the
illustration sent to you is the value that will be used to purchase a pension regardless of the life office chosen.
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LETTER 7B: Letter to member with illustrations
Civil Service AVC Scheme
Dear
Civil Service AVC Scheme (CSAVC)
Thank you for returning the illustration request form. (Insert name of the provider) has now provided the
illustration(s) you requested and I enclose them, together with several forms for your consideration. The
figures shown in the illustration(s) may change before the annuity is brought into payment to reflect market
fluctuations.
New rules affect pension payments from 6 April 2006. There is a limit on the value of the tax-privileged
pension and lump sum you can receive. This limit is in the form of a Lifetime Allowance (LTA). Your
Estimated Lifetime Allowance on the value of your CSAVC benefits as a percentage of the LTA is (insert %)
We will of course issue you with an LTA certificate on the total fund value of your CSAVCS benefits once your
CSAVCS benefits have crystallised.).Further details about the LTA (including its value) and other changes
which may affect you are given in the enclosed tax leaflet
You now have the following options:
1
2
3
Purchase pension benefits with a CSAVC provider, taking up to 25% of the fund value as a tax free
lump sum subject to the Lifetime allowance.
Purchase pension benefits on the Open Market, taking up to 25% of the fund value as a tax free lump
sum subject to the Lifetime allowance.
Defer purchasing an annuity to a date no later than your 75th birthday.
Option 1 – To purchase an annuity with a CSAVC provider.
If you wish to purchase an annuity with one of the CSAVC providers please complete and return the enclosed
Payment Details Form and the Acceptance CSAVCS Benefits Form to me as soon as possible. Upon receipt
of these forms I will arrange for your lump sum to be paid and for the provider to bring your annuity in to
payment.
Payment of the annuity will be made by your chosen porvider(s) direct to your bank/building society account
after the deduction of tax under the PAYE system. In order to do this please give details of your tax district and
reference on the Payment Details Form.
If you choose to purchase an annuity from one of the CSAVC providers, the Minister for the Civil Service will
guarantee future payments if the CSAVC provider is unable to continue payment for any reason.
Option 2 – To purchase an annuity from an Open Market annuity provider.
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You do not have to purchase an annuity with one of the Civil Servcie AVC providers and may, if you wish,
purchase this from another company of your choice by taking the Open Market Option. The company you
choose must be either be:
•
•
A society registered as a friendly society under Section 7(1)(a) of the Friendly Societies Act 1974, or
under Section 1(1)(a) of the Friendly Societies ACT (NI) 1970 or
A UK branch or office of an insurance company covered by Part 11 of the insurance Company Act
1982 and which is authorised under Section 3 or 4 of the Act to carry on long term insurance business
as defined in the Act.
If you choose the Open Market Option (OMO) it is up to you to obtain annuity illustrations from your chosen
provider(s). We will require written confirmation on their headed paper that they satisfy the above
requirements. You will also need to complete and return to me the enclosed Open Market Option form. This
discharges the Minister of any liability regarding your CSAVC.
If you would like to take a lump sum under the OMO your CSAVC provider will pay the money to your account
before the remainder of your CSAVC fund is sent to you new provider. We therefore request you complete the
Payment Details Form.
Option 3 – Deferement of purchase until any time up to the day before your 75th birthday.
You may defer purchasing an annuity until any time up to the day before your 75th birthday. If this option is
chosen please complete the Deferred Annuity Purchase Option form and return it to me. When you wish to
consider purchasing an annuity please contact me again so that I can obtain the appropriate illustrations for
you.
*** Delete if funds are not with Scottish Widows ***
Please note that Scottosh Widows currently impose a Market Value Reduction (MVR) on some CSAVC withprofits investments if you do not take your AVC at normal pension age (Usually 60 in the Civil Service Pension
Scheme). You should contact them before you reach pension age on 08000284419 and they will be able to
advise you how you can avoid this happening.
Financial Advice
Before you make your decision to purchase an annuity it is recommended that you seek independent financial
advice. If you have any queries concerning these arrangements, please let me know.
Yours sincerely
Enclosed:
Annuity illustrations
Acceptance of CSAVCS benefit form
Payment Details Form
Open Market Option Form
Deferred Annuity Purchase Form
Pensions and Tax Leaflet
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NEW
LETTER 7BE: Letter to member with illustrations if taking benefits
before pension age
Civil Service AVC Scheme
Dear
Civil Service AVC Scheme (CSAVC)
Thank you for returning the illustration request form. (Insert name of the provider) has now provided the
illustration(s) you requested and I enclose them, together with several forms for your consideration. The
figures shown in the illustration(s) may change before the annuity is brought into payment to reflect market
fluctuations.
New rules affect pension payments from 6 April 2006. There is a limit on the value of the tax-privileged
pension and lump sum you can receive. This limit is in the form of a Lifetime Allowance (LTA). Your
Estimated Lifetime Allowance on the value of your CSAVC benefits as a percentage of the LTA is (insert %)
We will of course issue you with an LTA certificate on the total fund value of your CSAVCS benefits once your
CSAVCS benefits have crystallised).Further details about the LTA (including its value) and other changes
which may affect you are given in the enclosed tax leaflet
You now have the following options:
1
2
3
Purchase pension benefits with a CSAVC provider, taking up to 25% of the fund value as a tax free
lump sum subject to the Lifetime allowance.
Purchase pension benefits on the Open Market, taking up to 25% of the fund value as a tax free lump
sum subject to the Lifetime allowance.
Defer purchasing an annuity to a date no later than your 75th birthday.
Option 1 – To purchase an annuity with a CSAVC provider.
If you wish to purchase an annuity with one of the CSAVC providers please complete and return the enclosed
Payment Details Form and the Acceptance CSAVCS Benefits Form to me as soon as possible. Upon receipt
of these forms I will arrange for your lump sum to be paid and for the provider to bring your annuity in to
payment.
Payment of the annuity will be made by your chosen porvider(s) direct to your bank/building society account
after the deduction of tax under the PAYE system. In order to do this please give details of your tax district and
reference on the Payment Details Form.
If you choose to purchase an annuity from one of the CSAVC providers, the Minister for the Civil Service will
guarantee future payments if the CSAVC provider is unable to continue payment for any reason.
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Option 2 – To purchase an annuity from an Open Market annuity provider.
You do not have to purchase an annuity with one of the Civil Servcie AVC providers and may, if you wish,
purchase this from another company of your choice by taking the Open Market Option. The company you
choose must be either be:
•
•
A society registered as a friendly society under Section 7(1)(a) of the Friendly Societies Act 1974, or
under Section 1(1)(a) of the Friendly Societies ACT (NI) 1970 or
A UK branch or office of an insurance company covered by Part 11 of the insurance Company Act
1982 and which is authorised under Section 3 or 4 of the Act to carry on long term insurance business
as defined in the Act.
If you choose the Open Market Option (OMO) it is up to you to obtain annuity illustrations from your chosen
provider(s). We will require written confirmation on their headed paper that they satisfy the above
requirements. You will also need to complete and return to me the enclosed Open Market Option form. This
discharges the Minister of any liability regarding your CSAVC.
If you would like to take a lump sum under the OMO your CSAVC provider will pay the money to your account
before the remainder of your CSAVC fund is sent to you new provider. We therefore request you complete the
Payment Details Form.
Option 3 – Deferement of purchase until any time up to the day before your 75th birthday.
You may decide you do not wish to draw your CSAVCS benefits yet but prefer to leave them with the provider.
If you do this you can if you wish continue to contribute to your AVC as long as you remain in service. If you
have not drawn your CSAVC before your main scheme pension comes into payment you will be given option 1
and 2 again and a 3rd option to defer purchasing an annuity until any time up to the day before your 75th
birthday. If this option is chosen you will be asked to complete a Deferred Annuity Purchase Option form.
*** Delete if funds are not with Scottish Widows ***
Please note that Scottosh Widows currently impose a Market Value Reduction (MVR) on some CSAVC withprofits investments if you do not take your AVC at normal pension age (Usually 60 in the Civil Service Pension
Scheme). You should contact them before you reach pension age on 08000284419 and they will be able to
advise you how you can avoid this happening.
Financial Advice
Before you make your decision to purchase an annuity it is recommended that you seek independent financial
advice. If you have any queries concerning these arrangements, please let me know.
Yours sincerely
Enclosed:
Annuity illustrations
Acceptance of CSAVCS benefit form
Payment Details Form
Open Market Option Form
Deferred Annuity Purchase Form
Pensions and Tax Leaflet
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Form 7.2: Open Market Option Request
This form should be completed by a member of the Civil Service AVC Scheme who wishes to elect to
purchase a pension/annuity benefits with a company other than Standard Life Assurance Company, Scottish
Widows plc or The Equitable Life Assurance Society
SURNAME
_____________________________________________
OTHER NAME(S) _____________________________________________
HOME ADDRESS _____________________________________________
_____________________________________________
_____________________________________________
NATIONAL INSURANCE NUMBER ________________________________
DATE OF BIRTH ______________________________________________
I request that the proceeds of my AVC investment fund with The Scottish Widows plc / Standard Life
Assurance Company/ The Equitable Life Assurance Society is used to purchase a personal/dependants**
annuity from:____________________________________________________ (enter name of company/society)
LUMPSUM
I would like to take (insert percentage up to a maximum of 25%) as a cash lump sum, and understand
this will be paid in to my bank account before the remainder of my CSAVC fund is sent to the
provider I have indicated above.
I understand, that by electing for the purchase of benefits to be provided by an insurer or friendly society, not
determined by the Cabinet Office, the making of this election will have the effect of discharging any liability of
the Cabinet Office to pay those benefits to me.
I attach, to this form, written confirmation that the insurance company/friendly society, named above, is
either:1. A society registered as a friendly society under Section 7(1) (a) of the Friendly Societies Act 1974 or
Section 1(1) (a) of the Friendly Societies Act (Northern Ireland) 1970; or
2. A United Kingdom branch or office of an insurance company to which Part II of the Insurance Company
Act 1982 applies and which is authorised by or under Section 3 or 4 of that Act to carry on ordinary long
term insurance business as defined in that Act.
Signature
__________________________
Date
_______________
**Delete as appropriate
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Form 7.3: Deferred Lump sum and Annuity Purchase
CIVIL SERVICE AVC SCHEME
Please complete this form if you are a member of the CSAVCS and you have retired from the CSPS and
wish to defer taking your CSAVCS benefits until a later date, but no later than the day before your 75th
birthday.
SURNAME:____________________________
OTHER NAME(S):_______________________
HOME ADDRESS:
____________________________________
____________________________________
____________________________________
NATIONAL INSURANCE NUMBER: __________________DATE OF BIRTH: _________________
My occupational pension under the Civil Service Pension Scheme comes/came into payment on
__________________. I understand that, as a contributor to the Civil Service AVC Scheme, I am eligible
from that date to take the benefits that I have built up in the Civil Service AVC Scheme with Equitable Life
Assurance Society and/or Scottish Widows plc and/or Standard Life Assurance Company. I also understand
that I can if I wish take up to 25% of my CSAVC fund or 25% of the remaining Lifetime Allowance (LTA) as a
tax free lump sum and the remainder of the fund will be used to buy an annuity/pension.
I understand that I am not obliged to take this option immediately and, if I so choose, may opt to defer taking
my CSAVC benefits until anytime up to the day prior to my 75th birthday.
I hereby give notice that I wish to defer taking my CSAVC benefits beyond the date my Civil Service
Pension Scheme pension comes into payment, but not later than the day prior to my 75th birthday.
In making this decision I understand that:
ƒ
it remains open for me to elect to take my CSAVC fund in the form of a lump sum and/or annuity at
any time up to the day prior to my 75th birthday. If I fail to take my CSAVC before I reach 75 I will lose the
right to take any of my fund as a lump sum.
ƒ
I understand that although I am not obliged take my CSAVC benefits immediately it does not imply
that deferral will necessarily be to my advantage;
ƒ
If I die before taking my CSAVC benefits the value of my fund will either be used to purchase a
pension (annuity) for my spouse/Civil Partner or they can if they prefer receive a cash refund of the value
of my CSAVC fund as a cash lump sum.
ƒ
neither the Cabinet Office, my employing department, nor my Provider can offer me advice on the
timing of taking my CSAVC benefits or on the possible benefits and risks of deferral;
ƒ
if I am in any doubt I should consult an Independent Financial Adviser.
ƒ
I undertake to advise my APAC of any change of address or personal circumstances.
Signature_____________________________________
Date____/____/20____
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FORM 7.4 – Acceptance of CSAVC Benefit Form
Civil Service AVC Scheme
Member Name:
I confirm that I wish to take the following percentage of my CSAVC fund as a
lump sum
%
I confirm that I wish to purchase the following annuity:
The Annuity is Offered by
Scottish Widows
Equitable Life
Standard Life
Based on a guarantee period
Nil years
5 years
10 years
Escalation rate of
Nil Increase
Index linked
Fixed % up to 3%
Spouses Cover of
Nil
½ my annuity
2/3 my annuity
Signature ………………………………..(member)
Date…./…../…..
Please return this form together with the annuity payment details form to:
APAC (Insert details)
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FORM 7.5 – CSAVC Pension Payment details
Civil Service AVC Scheme
To be completed by the member (IN BLOCK CAPITALS)
Scheme Number:
( To be completed by department)
The provider will pay the member’s lump sum and/or pension under the scheme after deduction of tax under the PAYE
system.
Full name of member:
National Insurance Number:
Home Address:
Your pension will be paid direct to a bank account, a building society account or a Girobank plc account. Please
provide details below:
Name of bank/building society/Girobank plc:
Name of branch:
Address of branch:
-
-
Branch No:
Account No:
Account in the name(s) of:
In order to pay your pension after deduction of the correct amount of tax, the Provider needs to know the following
details concerning your Inspector of Taxes.
Tax District:
Tax Reference No:
Signature:
Date:
THIS FORM SHOULD BE RETURNED TO YOUR SCHEME ADMINISTRATOR.
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NEW
Form 7.6 PERSONAL DETAILS FORM FOR CSAVCS
Civil Service AVC Scheme
Please check and complete this form.
NOTE : You must complete this form and return it to us before we can pay your CSAVC benefits.
Please remember to sign and date the Declaration at the end of the form
We are asking you to give us current information about you, and your nomination for death benefit (if you
have made one).
We are also asking you to give us information about any other pension arrangement you may have, including
benefits you have already taken or are about to take.
1:
Your personal details
Name:
Staff/PI No:
Date of birth:
Member No:
NI number:
Marital status:
Address:
Postcode
Home Tel number:
Home e-mail address:
2:
Additional Voluntary Contributions
(AVCs)
I have CSAVCS benefits with:
Scottish Widows
…
Equitable Life
F
Fund
Value taken from my last benefit statement
…
Standard Life
†
£
3:
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IMPORTANT NOTE BY HM REVENUE AND CUSTOMS (HMRC)
If you or any individual makes a false statement or representation in the completion of Qs 1 – 6, whether
fraudulently or negligently, they will become liable to a penalty of up to £3,000 if this results in relief from
any lifetime allowance charge being obtained (or any tax due).
If you make a false declaration relating to an entitlement to an enhanced lifetime allowance (see Q1),
whether fraudulently or negligently, you will become liable to a penalty of up to 25% of any relevant excess.
Before benefits can be paid from a registered pension scheme, such as the Civil Service AVC Scheme (CSAVCS), we
must establish whether paying the benefits will give rise to a chargeable amount for tax purposes. This is known as the
lifetime allowance charge (see ‘Your pension and tax’ booklet).
Q1 Have you applied to HMRC and been granted a primary protection and/or
enhanced protection entitlement that you wish to rely on at this time?
(See ‘Your pension and tax’ booklet)
Yes
No
If you have answered “Yes”, please provide a copy of the certificate(s) provided
by HMRC which confirm your entitlement.
Q2 Are you currently in receipt of a pension or pensions, including any
benefits from the CSPS or any benefits from an additional voluntary
contribution arrangement which commenced before 6 April 2006?
Yes
No
If you have answered “Yes”, please confirm the total current level of pension
received (before tax) from all sources (except for State pension and/or a
survivor pension in your own right).
Q3 Have you received pension and/or lump sum benefits from other registered
pension schemes on or after 6 April 2006?
Yes
No
If you have answered “Yes” then you should have been provided with a
statement from the Administrator of the other scheme(s) confirming the
amount of your lifetime allowance already used up. Please provide the
statement(s) ( copies) with this declaration.
If ” yes” please state number of certificates/Statements attached.
Q4 Do you intend to take retirement benefits from other registered pension schemes,
including any deferred CSPS benefits, AVCs, or Stakeholder pensions,
at the same time as taking your CSAVC benefits?
Yes
No
If you have answered “Yes”, you will need to obtain an estimate of the anticipated
lifetime allowance which will be used up under the other scheme(s) from the
Administrators of those arrangements and provide copies to us.
For AVCs and Stakeholder pensions please give the fund amount shown on your
last benefit statement
Q5 If your answer to question 4 was “Yes”, you need to decide the order in which benefits will be taken from
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each scheme for the purpose of undertaking the lifetime allowance test. This is particularly important
where you are likely to exceed your lifetime allowance as the order in which benefits are taken will
dictate which scheme or schemes will be responsible for settling any tax liability. You should include in your
decision any PCSPS benefits being taken.
Name of Scheme/Policy No
Contact Details
Order in which taken
(first, second, etc)
Q6 Please provide details of any other benefits you will be taking in the next 6 months (i.e. other than listed at Q5)
Name of Scheme/Policy No
Contact Details
Date to be taken
Recycling of Pension Lump Sums
Please read the NOTE below, and then answer these questions. We will use your answers to assess whether a tax
charge may apply.
1.
Do you intend to use any part of your lump sum to fund additional contributions to the Civil
Service pension scheme or to any other pension arrangement?
Yes
No
If the answer is YES, please answer the question below:
2. How much of your Civil Service or AVC lump sum do you intend to pay into a
pension arrangement?
£
NOTE:
If you intend to use part, or all, of your pension/AVC lump sum to fund additional contributions to the Civil
Service pension scheme, or to any other pension arrangement, this is known as “recycling” and special tax
rules may apply. If you break the recycling rules you will have to pay a tax charge of between 40% and 55%
of the value of your pension lump sum. The recycling rules will not affect you in the following circumstances:
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•
If your pension lump sum together with any other pension lump sum paid in the preceding 12 months
is less than 1% of the Lifetime Allowance at the time it is paid. (In 2006-07 the limit is £15,000 = 1%
of. £1,500,000.)
•
If the contribution you intend to pay, or have paid in anticipation of receiving your pension lump sum,
is less than 30% of the pension lump sum. If you increase your contributions in the two tax years up
to your retirement as well as in the tax year that your pension lump sum is paid, you will fall foul of
the recycling rule if this is a pre-planned means of using the lump sum payable at a future date, for
example by using the lump sum to replenish savings that you have used to make contributions to a
pension arrangement.
You can find guidance on recycling in Her Majesty’s Revenue and Customs’ (HMRC) Registered Pension
Scheme Manual from RPSM04104900 onwards and at RPSM12200035 on their website at:
www.hmrc.gov.uk/pensionschemes
Further details can be found on the HMRC website at:
www.hmrc.gov.uk/pensionschemes/fb_guidance.pdf
HMRC has the power to look into individual cases to see if the recycling rules have been broken. If after
reading the HMRC guidance notes, you are still unsure whether the recycling rules affect you, you should
speak to an independent financial advisor or contact HMRC at the address below:
HM Revenue & Customs
Audit & Pension Schemes Services
Yorke House
Castle Meadow Road
Nottingham
NG2 1BG
Declaration
I certify that the information given on this form is correct and completed to the best of my knowledge and belief.
•
I understand that any overpayment of benefits may be recovered and that I am responsible for notifying my Pension
Scheme Administrators APAC of any change of circumstances which might affect my entitlement.
If I become aware of any alteration to the information I have given in Qs 1 – 5 on this form after it has been
submitted to my APAC, I agree to notify them of any alterations at the earliest opportunity.
Signed:
Date:
Name:
(in CAPITALS)
NEW
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LETTER 7C: Confirmation of Annuity, Lump sum and LTA
Civil Service AVC Scheme
Dear
Please delete as necessary
I am writing to confirm that your lump sum has been paid into your account as requested and your annuity has
now been set up as requested and enclose a letter from Standard Life/Scottish Widows/Equitable Life
confirming this.
I am writing to confirm that your lump sum has been paid into your account as requested and the remainder of
your CSAVCS benefits have been transferred to your new provider in order for them to set up your annuity. I
enclose a letter from Standard Life/Scottish Widows/Equitable Life confirming this.
You will already be aware that there is a limit on the value of the tax-privileged pension and lump sum you can
receive and this is in the form of a Lifetime Allowance (LTA). Your LTA certificate on the value of your
CSAVC benefits is enclosed. Please keep this certificate safe as you may need to provide this certificate at a
future date. Further details about the LTA (including its value) and other changes which may affect you are
given in the Pensions and tax booklet we sent to you in our previous letter.
Please let me know if you require any further help.
Yours sincerely
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LETTER 7D: Sending LTA certificate to the provider
Civil Service AVC Scheme
Dear (CSAVC provider)
I enclose a copy of the Lifetime Allowance Certificate we have supplied to (insert members name) in respect of
the crystallisation of their CSAVCS benefits on (insert date) for your records.
Dear (OMO Provider)
I enclose a copy of the Lifetime Allowance Certificate (LTA) in respect of (insert member’s name) who was a
member of the Civil Service Additional Voluntary Contribution Scheme and took an Open Market Option from
the scheme. The LTA certificate is based on the member’s total fund value.
Yours sincerely
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Letter 7E Deferred member retiring
Civil Service AVC scheme
Ref:
Date
Dear
I am writing to you about your CSAVCS benefits which have been deferred in the CSAVCS since your main
civil service pension scheme benefits became payable.
As you have now indicated that you would like to take your CSAVCS benefits you have the following options:
•
You can take up to 25% of your total fund or if a lesser amount 25% of your remaining Lifetime
Allowance as a tax free lump sum with either of the following two options:
•
To purchase an annuity (pension) from one of the CSAVC providers with a tax free lump sum as
described above. If you choose this option your annuity (pension) will be paid by the Minister for the
Civil Service in the unlikely event of non-payment by the financial institution.
Or
• To purchase annuity (pension) on the open Market (i.e. not with one of the CSAVC providers). This
option will discharge any liability of the Minister for the Civil Service to pay benefits under the
CSAVCS to, or in respect of, you. You will still be able to take a tax free lump sum as previously
described and this will be paid by the CSAVC provider before the remainder of you CSAVC fund is
passed to your new provider.
We can arrange for illustration from the CSAVCS providers but it is for you to arrange for illustrations from
insurers on the Open Market. If you wish to receive annuity illustration from one of the CSAVC providers or
swish to obtain a fund value so that you can obtain illustrations on the Open Market please complete and
return the enclosed form (Form7.1) to the above address.
As we are not authorised to provide you with advice on investment routes open to you, you may want to seek
your own independent financial advice
I am enclosing a copy of your death benefit nomination form. If you wish to change your nomination please
complete and return the enclosed form 1.1. This nomination form is for CSAVC benefits only.
I am also enclosing a Personal Details Form which will give us the necessary information we will need to
proceed. Please complete and return this form in the pre-paid return envelope we have provided for your use.
Yours sincerely
Encs
Form 7.1
Form 1.1
Personal Details Form
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AVC 3.2 Annex A
Letter 7F Letter to Deferred member retiring sending illustrations
Civil Service AVC scheme
Dear
Civil Service AVC Scheme (CSAVC)
Thank you for returning the illustration request form. (Insert name of the provider) has now provided the
illustration(s) you requested and I enclose them, together with several forms for your consideration. The
figures shown in the illustration(s) may change before the annuity is brought into payment to reflect market
fluctuations.
New rules affect pension payments from 6 April 2006. There is a limit on the value of the tax-privileged
pension and lump sum you can receive. This limit is in the form of a Lifetime Allowance (LTA). Your
Estimated Lifetime Allowance on the value of your CSAVC benefits as a percentage of the LTA is (insert %)
We will of course issue you with an LTA certificate on the total fund value of your CSAVCS benefits once your
CSAVCS benefits have crystallised.).Further details about the LTA (including its value) and other changes
which may affect you are given in the enclosed tax leaflet
You now have the following options:
1
2
Purchase pension benefits with a CSAVC provider, taking up to 25% of the fund value as a tax free
lump sum subject to the Lifetime allowance.
Purchase pension benefits on the Open Market, taking up to 25% of the fund value as a tax free lump
sum subject to the Lifetime allowance.
Option 1 – To purchase an annuity with a CSAVC provider.
If you wish to purchase an annuity with one of the CSAVC providers please complete and return the enclosed
Payment Details Form and the Acceptance CSAVCS Benefits Form to me as soon as possible. Upon receipt
of these forms I will arrange for your lump sum to be paid and for the provider to bring your annuity in to
payment.
Payment of the annuity will be made by your chosen porvider(s) direct to your bank/building society account
after the deduction of tax under the PAYE system. In order to do this please give details of your tax district and
reference on the Payment Details Form.
If you choose to purchase an annuity from one of the CSAVC providers, the Minister for the Civil Service will
guarantee future payments if the CSAVC provider is unable to continue payment for any reason.
Option 2 – To purchase an annuity from an Open Market annuity provider.
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AVC 3.2 Annex A
You do not have to purchase an annuity with one of the Civil Servcie AVC providers and may, if you wish,
purchase this from another company of your choice by taking the Open Market Option. The company you
choose must be either be:
•
•
A society registered as a friendly society under Section 7(1)(a) of the Friendly Societies Act 1974, or
under Section 1(1)(a) of the Friendly Societies ACT (NI) 1970 or
A UK branch or office of an insurance company covered by Part 11 of the insurance Company Act
1982 and which is authorised under Section 3 or 4 of the Act to carry on long term insurance business
as defined in the Act.
If you choose the Open Market Option (OMO) it is up to you to obtain annuity illustrations from your chosen
provider(s). We will require written confirmation on their headed paper that they satisfy the above
requirements. You will also need to complete and return to me the enclosed Open Market Option form. This
discharges the Minister of any liability regarding your CSAVC.
If you would like to take a lump sum under the OMO your CSAVC provider will pay the money to your account
before the remainder of your CSAVC fund is sent to you new provider. We therefore request you complete the
Payment Details Form.
Financial Advice
Before you make your decision to purchase an annuity it is recommended that you seek independent financial
advice. If you have any queries concerning these arrangements, please let me know.
Yours sincerely
Enclosed:
Annuity illustrations
Acceptance of CSAVCS benefit form
Payment Details Form
Open Market Option Form
Pensions and Tax Leaflet
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AVC 3.2 Annex A
8.1 The pensionable earnings cap
Deleted
9.0 SCHEME ANNIVERSARY
The annual anniversary date of the scheme is 6 April.
Following the anniversary date each year, Standard Life & Scottish Widows will issue the Annual
Benefit statement direct to the member’s home address. APACs must let the providers know if any
of their CSAVC investers change their home address. For Equitable Life members statements will
be issued by the Cabinet Office, Civil Service Pensions, APACs must therefore notify Cabinet
Office Civil Service Pensions of any change of address for Equitable Life members.
Notes:
The purpose of the Annual Benefit Statement is to show the member, the value of the fund and units
held at the scheme anniversary date. The statements include all premiums received and applied by
the Provider in the 12 months up to and including the scheme anniversary date. Statements are
produced for all active and deferred members of the scheme.
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AVC 3.2 Annex A
Index to Letters and Forms
Civil Service AVC Scheme
Note: These letters can be found at the end of each relevant section in the manual
Section 1- New member Joining
To member re application for additional death in service life cover
L 1A
Nomination/revocation for CSAVC death benefit
F 1.1
Supplementary form to 1.1
F 1.2
To member re request for CSAVC information
L 1B
To member confirming CSAVC application/monthly contributions
L 1C
To provider with CSAVC application form.
L 1D
Information leaflet
IF 1
To Equitable Life re life assurance cover post 60
L 1E
To member re options for Life assurance cover post 60
L 1F
To member confirming post 60 Life Cover choice
L 1G
To Equitable Life concerning members post 60 Life Assurance cover choice
L 1H
To member concerning continuing Life Assurance choices post 60
L 1J
Section 2 – Payment/Contributions
The standard format for the Contributions schedule
F 2.1
To the member confirming contribution level
L 2A
To the member ceasing contributions
L 2B
Change of contribution form
F 2.1a
Section 3 – Transferring money into the CSAVCS
To member who wishes to transfer a Pre A day FSAVC into the CSAVCS
L 3A
APAC letter to exporting provider
L 3B
To member with Transfer value
L 3C
To previous provider/department requesting payment
L 3D
To New CSAVC provider with Cheque
L 3E
To member confirming transfer
L 3F
To previous scheme chasing payment
L 3G
To member chasing a reply to the transfer request
L 3H
Covering letter to member for switching provider
L 3J
Change of provider
F 3.1
Section 4 – Lump Sum Contributions
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F 4.1
L 4A
L 4B
L 4C
AVC 3.2 Annex A
Application for payment of lump sum contributions
Lump sum contributions
Confirmation letter to member (by payroll deduction)
Member confirmation (Payment by cheque)
Section 5 – Member leaving scheme before retirement
Option on leaving the AVC Scheme
L 5.0
Member leaving service before retirement
F 5.1
Transfer of AVC to New Employer/Pension Scheme
L 5A
Member leaving scheme (Less than 2 years service)
L 5B(i)
Apac notification to HMRC (less than 2 years service)
L 5B(ii)
Member defers benefits in scheme
L 5C (i)
L 5C (ii) Member left with ACP under CSPS Classic
Notification to employer/payroll of cessation of contributions
L 5D
Section 6 – Death in Service
Death of a member
F 6.1
To nominee following death of a CSAVCS member
L 6A
To Partner of deceased CSAVCS member
L 6B
Covering letter with cheque to nominee
L 6C
Section 7 – Retirement Section
Member Retiring
L 7A
Member drawing benefits before retirement (NEW)
L.7AE
Member requests drawing benefits at age 50 but
L.7AN
F 7.1
L 7B
L.7BE
F 7.2
F 7.3
F 7.4
F 7.5
L 7.6
F 7C
L 7D
L.7E
L.7F
not eligible until age 55
(NEW)
Retirement illustration request
Letter to member with illustrations
Letter to member with illustrations if taking benefits before pension age (NEW)
Open Market Option request
Deferred Lump Sum and annuity purchase
Acceptance of CSAVC benefit
CSAVC pension payment details form
Confirmation of annuity, Lump sum and LTA Certificate to member
CSAVC Personal Details Form (NEW)
LTA Certificate to CSAVC provider or OMO provider
Deferred member retiring
Sending illustrations to deferred member
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3.3
AVC: 3.3
This section has been deleted
options \ 3.3
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Options and AVCs
AVC: 3N
Notes on best practice
Options & AVCs (CSAVC scheme)
These notes set out how the Cabinet Office uses its discretion under the
CSAVC scheme.
Discretion
1
Paying CSAVC benefits as a lump sum.
The Cabinet Office recommends that the guidance set out in these
Notes on best practice is followed by departments with discretions
exercising their delegated discretion, taking account of the individual
circumstances of each case.
options \ 3N
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Issue 5: April 2006
AVC: 3N
Options and AVCs
Notes on best practice
In drawing up the Notes on best practice the Cabinet Office has taken into
account:
•
the need to ensure consistency and fairness for all members and
other beneficiaries;
•
the need to protect public funds; and
•
the need to minimise the risk of legal challenge.
Use of discretion
Departments with discretions use their delegated discretion in respect of:
•
their own staff (as set out in their Delegation Instrument); and
•
the staff of any other employing department for whom they act
under the delegated authority set out in the other employing
department’s Delegation Instrument.
The Cabinet Office takes the decisions in respect of the staff of all other
employing departments. Employing departments must refer cases as
necessary.
Departments with discretions must refer cases to the Cabinet Office when:
•
there is doubt about whether to take a decision using delegated
discretion. (Example: when the circumstances of a case are
borderline);
•
there are contentious aspects to the case (for example, when a
policy matter is involved which has not previously been
considered); or
•
TPAS or the Pensions Ombudsman are involved.
The Cabinet Office:
•
monitors how departments with discretions use their delegated
discretion; and
•
determines questions arising under the CSPS. When a
department with discretions uses its discretion, the Cabinet Office
determines any questions about the rules within a formal disputes
and appeals procedure.
Information
Reference
Further
information
Pensions Manual
Dispute resolution
options \ 3N
Administration & Finance
(2)
Issue 5: April 2006
Options and AVCs
1
AVC: 3N
Paying CSAVC benefits
as a lump sum
(CSAVC rule 4.5(ii))
Condition
CSAVC scheme benefits can be taken in the form of a lump sum of up to
25% of the fund and/or an annuity on retirement from the Civil Service when
the CSPS pension benefits become payable. ( see 3.1)
Discretion
Benefits may be taken entirely as a lump sum when the member is in
exceptional circumstances of serious ill health, and no benefits have been
paid.
Notes
The aim is to establish whether the conditions for payment have been met.
There is a HMRC requirement that benefits may be paid in lump sum form
only in exceptional circumstances of serious ill health. This applies to
benefits under the CSPS and under the CSAVC scheme.
Serious ill health under the PCSPS is interpreted as referring to cases where
a member’s life expectancy is medically certified as being less than 12
months.
Members applying to take CSAVC benefits as a lump sum would normally
apply also for their CSPS benefits to be taken as a lump sum. An option to
take CSAVC benefits as a lump sum is given when an option to commute a
CSPS pension on grounds of serious ill health has been (or would be)
accepted.
Information
Further
information
Reference
Pensions Manual
Option to commute pension (serious ill health).
options \ 3N
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Early Retirement: 7.5
Issue 5: April 2006