Additional Pension Contributions (APCs)
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Additional Pension Contributions (APCs)
If the member is in the main section of the LGPS they can pay additional contributions to buy up to £7,316 of extra pension, either to boost their pension benefits at retirement or to buy back 'lost' pension due to absence.
The member cannot elect to buy extra pension if they are in the 50/50 section of the LGPS unless it is to purchase 'lost' pension.
The member can choose to pay for the extra pension by spreading the payment of the Additional Pension Contributions (APCs) over a number of complete years or by paying a lump sum.
If the member wishes to spread the payment, the regular contributions would be deducted from their pay, together with the normal pension contributions.
If the member wishes to buy extra pension by paying a one-off lump sum, they can do so either via a payment from their pay or by making payment directly to Surrey Pensions Services.
If the member chooses to make the payment directly to Surrey Pensions Services, they will need to arrange tax relief directly with HMRC as the contributions are not being deducted from their pay. They can do this via their self-assessment tax return or by calling or writing to HMRC.
The minimum period of time that the member can spread the payment of APCs over is 12 months, and the maximum is the number of years to their normal pension age. The member's normal pension age is linked to their State Pension age (but with a minimum of age 65) and is shown on their Annual Benefit Statement. If the member is a year or less from their normal pension age they can only pay by lump sum.
Any additional pension purchased, whether to buy back 'lost' pension or purchase additional pension will not count towards any dependant's benefits.
APC to Purchase 'Lost' Pension
If the member is absent from work because of industrial action, authorised unpaid leave or unpaid additional child related leave, this period will not count towards their pension. The member can buy back the pension that they have lost during this time.
The member can do this regardless of whether they are in the main or 50/50 section of the Scheme and you should make the member aware the ability to buy 'lost' pension is available via an APC.
If the member elects to cover the break within 30 days of returning to work, you will meet two thirds of the cost (except where the absence is due to industrial action).
The member should complete section 1 of form LG35 and return the form to you to complete sections 2 and 3. You should then return the form to the member.
Once the form LG35 has been completed, the member should use the APC calculator on the national LGPS website to decide their payment preference. They will need to use the Buy lost pension – Quote and apply option on the calculator to obtain a quote. The APC calculator and application form is available to members.
The completed forms should be sent to you for checking and processing. You should then send a copy of the forms to lgps.forms@surreycc.gov.uk
The amount of contributions deducted from the member must be included in the i-Connect monthly return or via the annual return at the end of each financial year.
APC to Purchase Additional Pension
If the member is purchasing additional pension, they should complete form LG41 with their details (section A) and get the medical declaration completed by a registered medical practitioner (section B).
Once sections A and B of the form have been completed, they should use the APC calculator on the national LGPS website to decide their payment preference. They will need to use the Buy extra pension – Quote and apply option on the calculator to obtain a quote. The APC calculator and application form is available to members.
The member should return the fully completed LG41 APC Application Form and the Buying Extra Pension - Application for Additional Pension Contribution (APC) form from the website to Surrey Pension Services.
Surrey Pension Services will complete section C and forward the application to you to process.
Please complete section D to confirm that you have arranged for the Additional Pension Contributions to be collected and return the LG41 form and the APC application form to Surrey Pension Services at lgps.forms@surreycc.gov.uk
The amount of contributions deducted from the member must be included in the i-Connect monthly return or via the annual return at the end of each financial year.