To increase the value of the benefits that you and your dependants receive, you may:

• Pay additional LGPS contributions to purchase additional years of membership.

The effect of a period of sick leave or maternity, paternity or adoption leave on the additional contributions payable is detailed 'Here'.

Additional membership purchased counts towards the minimum total membership levels required by the LGPS for entitlement to a benefit and counts in working out the amount of your benefits, including whether the ’85 year rule’ (‘Click Here’) has been satisfied.

If you leave (other than on the grounds of permanent ill health) before completion of the contract to purchase additional years of membership you will credited with the proportion purchased to the date of cessation but if you change LGPS employer you may be able to continue paying the additional contributions.

Should you be retired on grounds of permanent ill health or die in service while paying additional contributions to increase your membership, the contributions will be deemed to be fully paid. This means that the full amount of additional membership being purchased will be used in the calculation of the benefits.

You may choose to cease paying additional contributions at any time by giving written notice of your wish to do so to the Clwyd Pension Fund and to your employer. Again you will be credited with the proportion purchased to the date of cessation.

• Make an additional voluntary contributions (AVC) arrangement.

Payments commence from the next available pay day after your election has been accepted and you may cease payment at any time whilst you are contributing to the LGPS.

You may transfer any previously accrued free standing AVCs and in house AVC funds to an in house AVC scheme at any time while you are a contributing member of the LGPS.

At retirement the accumulated fund in your account is used to buy you an annuity from an insurance company, bank or building society (but you can defer purchasing an annuity until age 75 at the latest).

If you carry on contributing to the LGPS beyond age 65 you will not be able to purchase an annuity until:

• you retire, or
• you reach the eve of your 75th birthday, or
• you have your employer’s consent for flexible retirement

Annuities are subject to annuity rates which in turn are affected by interest rates. When interest rates rise, the organisation selling annuities is able to obtain a greater income from each pound in your AVC fund, and therefore can provide a higher pension. Conversely a fall in interest rates reduces the pension which can be purchased.

Alternatively, upon leaving the LGPS with an immediate payment of pension benefits you will be able to use the accumulated fund in your AVC account to buy a top-up pension from the LGPS or use part to buy a top-up pension from the LGPS and part to purchase an annuity. The top-up pension from the LGPS will provide an inflation proofed pension and dependants' benefits.

At retirement, you may elect to take up to 100% of the accumulated fund in your in house AVC as a tax free lump sum if you draw it at the same time as your LGPS pension benefits, provided when added to the LGPS lump sum it does not exceed 25% of the overall value of your LGPS benefits (including your AVC fund) or, if less, 25% of the lifetime allowance less an adjustment for the value of any other pension benefits you are already drawing. If you defer drawing your AVC, you can draw up to 25% of the value of your AVC fund as a tax free lump sum at the time you decide to take your benefits from your AVC fund.

In certain circumstances, such as retirement on ill health grounds or cessation of payment of AVCs before retirement, the LGPS makes provision for AVCs to be converted into LGPS membership provided you commenced payment of the AVCs prior to 13 November 2001.

You can also pay AVCs to increase your death in service lump sum cover over and above the two times final pay provided by the LGPS, or to provide additional dependants' benefits.

• Repay a previous refund of LGPS contributions.

The repayment must be made within six months of re-joining the LGPS, or such longer period as your current and former administering authority may allow. This is an administering authority discretion; the Clwyd Pension Fund will look at each case individually. Once the repayment has been made, the period of membership will again count for pension purposes.

• Contribute to a concurrent personal pension plan or stakeholder pension scheme

If you choose to also pay into a personal pension plan or stakeholder pension scheme, the contributions you make in it are invested in funds managed by an insurance company. You have your won personal account that, over time, builds up with your contributions and the returns on your investment.

When the benefits become payable, up to 25% of the accumulated fund in your account can be taken as a tax free lump sum or, if less, 25% of the lifetime allowance less any adjustment for the value of any other pension benefits you are already drawing. The balance is used to buy you an annuity from an insurance company, bank or building society (but you can defer purchasing an annuity until the day before your 75th birthday at the latest). An annuity is a fixed amount of additional pension benefit, although you may be able to choose to include guaranteed annual increases and dependants’ benefits.

Annuities are subject to annuity rates which in turn are affected by interest rates. When interest rates rise, the organisation selling annuities is able to obtain a greater income from each pound in your personal pension or stakeholder fund, and therefore can provide a higher pension. Conversely a fall in interest rates reduces the pension which can be purchased.

Points to Note

• From 6 April 2006 you can, if you wish, pay up to 100% of your total taxable earnings in any one tax year (or £3600 if greater) into a number of concurrent pension arrangements of your choice and be eligible for tax relief on those contributions. There are however, controls on the pension savings you can have before you become subject to a tax charge.
• If you elect to pay additional contributions or to take out an AVC for additional death benefits, you may be required to satisfy certain medical conditions. You may be asked to complete a medical questionnaire and may be asked to undergo a medical examination at your own expense before your election is accepted.
• Providing the contribution limits above are not exceeded, the contributions will qualify for full tax relief.
• Further information on increasing your Scheme benefits is available in the ‘Topping Up Your Benefits’ section.