Active members of the Scheme can pay additional contributions to increase their pension benefits. There are a few options available for member-only contributions and also opportunities for employers to make a contribution to buy additional pension.  

Additional pension contributions (APC)

Members paying into the main section of the LGPS can pay additional contributions which will buy them additional pension. These contributions can be paid:

• by instalments over the period they choose 
• by a single  lump sum.  

For more details and a formal quote, members can use the Buy Extra Pension Calculator on the LGPS website.

The www.lgpsmember.org site will supply a quote, a formal letter and the terms and conditions.  Please note: members will also need to ask their GP to for a general health certificate. 

Other features of APCs:

• the contract is at a fixed rate of deduction amount and not a percentage rate of pay;
• there are no employer contributions payable;
• the member must be in the Main section (not the 50/50) to start a contract. The contract must stop if the member moves into the 50/50 section mid-contract;  

The Government Actuaries Department (GAD) may, at any time, amend the APC cost.  When this happens, Pension Services will contact each employing authority and the member to change the instalment rate which would apply from the following 1 April.

What employers need to do

There is lots of advice, examples and information in the LGA HR and Payroll Guide which can be found on the  LGPS regulations and guidance page.

When a member wants to buy extra pension by instalments

• Make sure the member has submitted the correctly completed forms to Pension Services
• Pension Services will then confirm the deduction and contract period to both the employer and the member.
• Employers will set up the deduction and supply deduction and payment confirmation monthly to:
  • Pension Services using the APC tab on i-Connect and
  • Pensions Investments noting the monthly contribution return   
• At the end of the contract, the employer must inform Pension Services of the date of the last contribution payment.
• The contract must stop if the member takes flexible retirement, 

When a member wants to buy extra pension by lump sum

• Make sure the member has submitted the correctly completed forms to Pension Services
• Pension Services will send the payment request, timetable and bank details to member 
• On receipt of payment, we will acknowledge and update pension record. 
• The APC will appear on the member’s next benefit statement.

The member's pay does not cover their contractual contribution

If the member is on certified sick leave with no pay, the employer should treat the contract as if the member has been paid. 

Please inform Pension Services if this happens.

Shared cost additional pension contribution (SCAPC)

SCAPCs can be: 

• Discretionary - all employers are required to have a policy on when and how they will contribute to the purchase of additional pension; OR
• Compulsory -  when an employee has an approved absence with no pay and chooses within 30 days to restore lost pension. For more information please click on our webpage

Additional voluntary contributions (AVC)

Additional Voluntary Contributions (AVCs) are where a member of the LGPS can pay an additional percentage of their pay into a money purchase arrangement. The AVC provider for the Oxfordshire Pension Fund is Legal and General.

If a member would like to start an AVC, employers can direct them to the Legal and General website.

If a member has elected to pay AVCs, Legal and General will notify your payroll department to deduct the relevant percentage. Members can now pay up to 100 percent of their pensionable pay into the AVC arrangement, which now includes ad hoc overtime and pay for additional hours.    

Paying over AVC contributions

• Do not send any AVC money to the Oxfordshire Pension Fund
• Do not list AVC values taken from pay on i-Connect

Arrangements under previous regulations

Additional regular contributions (ARCs)

• From 1 April 2008 to 31 March 2014, members of the LGPS could start to pay additional contributions to buy additional pension over a period they chose. Some of these contracts are still active.
• The Government Actuaries Department (GAD) may, at any time, amend the cost of the ARCs contract. If this happens, Pension Services will contact each employer and the member about the change to the additional contribution rate. The new rate will be effective from the following 1 April.
• Although there cannot be any new ARC contracts there could still be changes to those active contracts
• At the end of the contract, the employing authority should inform Pension Services of the date of the last contribution payment.
• If the member's pay does not cover the monthly additional contribution payment for any reason other than being on sick pay, the contract should stop immediately. No further additional pension contributions should be deducted and employers should inform Pension Services.
• Paying over the contributions to Oxfordshire County Council Pension Fund is covered on the Monthly LGPS contribution payments page.

Added years contracts

• Added years contracts have now been taken out of the LGPS. This means that no new requests to pay into an added years contract should be accepted, but nothing should change for those members who already have a contract in place.
• On completion of the contract, inform Pension Services that the contract has finished by email to pension.services@oxfordshire.gov.uk or making a note on i-Connect 

Arrangements set up before April 2014

Where an arrangement began before April 2014, it will continue until the person writes to Pension Services with instructions to stop or leaves their job.

A new starter could bring in a long-established additional regular contribution (ARC) or added years contract with them. Please contact Pension Services for specific advice in those cases. Additional payments to increase pension are usually deducted directly from the member's pay before taxation to ensure immediate tax relief and there are no employer contributions.

From April 2014, members have been able to choose to buy additional pension by making single payments. Where the cost cannot be recovered from the salary, it will be up to the member to declare this on their tax return. The member should always be aware of the effect their choice will have on their annual allowance – the annual maximum tax-free allowance for pension saving.