Definitions for "Additional Voluntary Contributions"
Additional contributions made voluntarily by company pension scheme members to boost their eventual retirement income. They are organised on a group basis, unlike FSAVC's and must not exceed 15% of remuneration when added to any existing scheme contribution.
An option available to individual members to secure additional pension benefits by making regular payments to the Avon Pension Fund's AVC provider up to a maximum of 15% of total earnings. (Scheme members will already be paying either 5% or 6% of Pensionable Pay to the Avon Pension Fund to secure the basic pension so that a further 9%/10% can be paid in the form of AVCs).
AVCs are a top-up payments made by people into their pension schemes to boost their eventual retirement income. There are two types of AVC. Additional voluntary contributions (AVCs). This type of top-up policy is run by employers, and contributions are normally taken from the employees pay. Free-Standing AVCs (FSAVC). A top-up pension policy that is taken out with an investment firm, and is separate to an employer's pension scheme. AVCs tend to be cheaper to make because the administration cost are lower as the employee will already be in the pension scheme. An FSAVC may be slightly more expensive due to an another company making the investment to make your money grow. The total amount that can be paid into a pension from all sources, including FSAVCs and AVCs must not exceed 15 per cent of your earnings in any tax year. Tax relief is also received on AVCs at your basic rate, as with other pension contributions.