Additional Regular Contributions (ARCs)
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Additional Regular Contributions (ARCs)
ARCs were introduced to the LGPS on 1 April 2008 and have since been replaced from 1 April 2014 with Additional Pension Contributions (APCs).
If a member has an existing ARC contract in force prior to 1 April 2014, this will continue from April 2014 on the terms of the original contract.
If the member is buying extra LGPS pension by paying ARCs, and they leave the scheme before retirement, they will be credited with the extra pension they have paid for at the time of leaving.
All ARCs, whether in payment or not, are revalued each year in line with CPI or RPI, depending on when the member took out the contract.
If the member is paying ARCs when they retire and qualify for Tier 1 or Tier 2 ill health pension, the member will be credited with all of the extra pension that they set out to buy within the contract, even though they have not completed the full payment for it.
If the member draws their pension benefits before age 65, either voluntarily or on redundancy or business efficiency grounds, the extra pension they have bought to their date of leaving through an ARC contract will be reduced for early payment.
If the member chooses to draw their pension benefits on flexible retirement, they can take all the extra pension they have paid for, to their date of the flexible retirement, although it will be reduced for early payment.
If they choose to draw the extra pension on flexible retirement, their ARCs contract will cease. If the member does not choose to draw the extra pension, the contract will continue on the ongoing position, providing the member remains in the LGPS.
Added Years
Before 1 April 2008, members were able to buy extra years of membership in the Local Government Pension Scheme (LGPS).
If a member has an existing Added Years contract in force prior to 1 April 2008, this will continue on the terms of the original contract.
As the Added Years payments are calculated as a percentage of the member's pay, any reduction or increase in the hours the member works will require the contract to be recalculated.
Therefore, it is essential Surrey Pensions Services are informed via i-Connect or by completing and returning the Change of Details spreadsheet.
Please submit the Change of Details spreadsheet via Egress Switch to pensions.technical@surreycc.gov.uk
When the member leaves, they will be credited with the Added Years of membership that they have paid for and will receive extra retirement benefits calculated on the membership purchased and their Final Pay.
If the member moves to a different position, whilst remaining in the LGPS, they can elect to transfer the contract to the new employment within the first year and repay any missing contributions.
If the member retires on ill health Tier 1 or Tier 2 whilst paying for Added Years, they will be credited with the whole extra period of membership that they set out to buy in the contract, even if they have not completed full payment for it.
If the member retires early due to redundancy or business efficiency whilst paying for added years, they will have the opportunity to pay the remaining contributions due in a lump sum to complete their contract. Any Added Years membership purchased will be paid unreduced.
If the member draws their benefits on taking flexible retirement, they will be credited with the extra years of membership that they have paid for and this will increase the value of their benefits paid on flexible retirement. The Added Years contract will cease (if they are still paying these extra contributions when they draw their benefits).
However, if the member elected on or after 1 October 2006 to commence their Added Years contract, they can if they wish, choose not to be credited with the extra years of membership on flexible retirement; their added years contract will continue on their ongoing employment, providing that the member remains in the LGPS.
If the member's benefits are reduced for early payment when they take payment of their benefits, then the pension purchased due to the Added Years are reduced in the same way. The reduction is applied based on the Normal Pension Age applicable to benefits built up before April 2014.