Transport for LondonTfL Pension Fund
Skip to navigationAdditional Voluntary Contributions (AVCs)
Active members can pay extra contributions to the Fund's AVC Plan.
Although the Trustees provide a facility for members of the Fund to pay AVCs it is a separate and personal arrangement between the individual and the AVC provider.
AVCs are paid into a personal fund and used to provide additional pension benefits on retirement.
- Who can pay
- Payment amounts
- Making payments
- AVC investment
- AVC tax advantages
- Transferring your AVCs
- AVCs on retiring
- In case of death
- Deferring payment of AVC benefits
- AVC annuities
- aged 64 or over
- planning to retire within a year of commencing AVCs
Who can pay
The majority of active members of the Fund are eligible. However you will not be able to pay AVCs if you are:Payment amounts
If you joined the pension scheme after 1 June 1989, you can pay up to 15 per cent of your gross taxable earnings (subject to the Scheme Earnings Cap) in each tax year, minus your normal contributions to the Fund.
If you joined the Fund before 1 June 1989, you can pay up to 15 per cent of your gross taxable earnings, minus your normal contributions.
You can change the amount you pay by contacting the Fund office.
Making payments
Your contributions are deducted from your pay by your employer. You can also make one-off payments.
You can stop payments by giving four weeks' notice.
AVC investment
Your AVCs are invested according to your choice. Read about the investment options.
- They will continue to be invested in accordance with your investment choices
- During the deferred period you can change your investments between the various funds offered
- You will continue to receive annual benefit statements confirming the value of your AVCs
- You must start drawing an income from your AVCs by the time you reach age 75, otherwise your AVCs will then be automatically used to buy an annuity
- Only 25 per cent of the fund value at the time you take your AVCs may be taken as cash with the rest used to buy you an annuity with an insurer
AVC tax advantages
Just like your main Fund contributions you get full tax relief on your AVCs. Investment returns on your AVC fund are free of income tax.
Transferring your AVCs
You can transfer your AVCs at any time before or after leaving service and drawing your benefits from the Fund.
AVCs on retiring
You may take up to 25 per cent of the value of your total benefits from the Fund as a tax-free lump sum when you retire. If your AVCs exceed this amount the balance must be used to buy you a pension from an insurer.
Alternatively, you may choose to use all or part of your AVCs to buy an annuity or defer payment.
In case of death
Your AVC fund may be payable to an adult dependant or eligible children as a tax-free lump sum at the discretion of the Fund's Trustees. This is subject to HMRC limits.
Deferring payment of AVC benefits
Your AVCs will remain in the TfL Pension Fund AVC Plan until you decide to take them.
AVC annuities
You can get quotations from the Fund's appointed AVC providers or from other insurance companies to assess which offers the best value.
If you decide to get quotes from other insurance companies you should contact them direct.
To help you, you could visit the Financial Services Authority's website at http://www.fsa.gov.uk/ and get instant quotes from a number of insurers. Alternatively you could contact the Annuity Bureau on 0845 602 6263.
