About Your AVCs

Additional Voluntary Contributions (AVCs) give you the option to pay contributions to build up additional retirement funds. These are administered by Legal & General.

Legal & General offer a range of Funds to choose from, you can select individual funds or we offer a lifestyle option where you select a target retirement age and your investments are switched between funds to reduce your exposure to investment risk as you approach retirement.

The Fund Rules limit the maximum amount you can pay in contributions to 15 per cent of your gross earnings subject to a maximum of 15 per cent of the Scheme Earnings Cap.  As standard contributions to the Fund are 5 per cent of Contributory Pensionable Salary that leaves scope to pay approximately 10 per cent in AVCs.

You can vary your AVCs by giving notice to the Fund Office, all we ask is that you try to give us as much notice as possible to allow time for TfL payroll to process your request.  You can do this by completing an AVC Contribution Rate Change form.

If you wish to change your investment choice or your target retirement age if you have chosen the lifestyle option, you can do this online through Legal & General’s “Manage Your Account” website, or by contacting Legal & General by telephone on 0345 070 8686 or email to employerdedicatedteam@landg.com

Your AVCs can be paid out as part of the tax free cash sum available when you retire, alternatively you can use your AVC fund to purchase annuity or transfer your AVCs to a personal arrangement under which you could drawdown your AVCs.

You can stop your AVCs by giving notice to the Fund Office, all we ask is that you try to give us as much notice as possible to allow time for TfL payroll to process your request.  You can do this by completing an AVC Contribution Rate Change form.

You receive tax relief on AVCs paid through the payroll automatically and this will be at your highest marginal rate of tax.  Please note that if you fall into a higher rate tax band, tax relief at that higher rate only apply at the higher rate to the extent that earnings exceed the start of the higher rate tax band.  For example if your earnings exceed the tax band by £2,000 but you pay £3,000 in pension contributions, you receive tax relief at the higher rate on £2,000 and at the lower rate on the remaining £1,000.

The annual Allowance is currently £60,000 unless you are subject to a reduced Annual Allowance, further details on this are included in the Guide to AVCs.  It is the amount you pay into the AVC Plan that count as pension savings to be measured against the Annual Allowance together with the increase in value of your TfL Pension Fund pension.

Your pension savings are measured against the annual allowance and we include details each year in your benefit statement.  If your pension savings exceed the Annual Allowance then you may be liable for a tax charge so when considering AVCs you will need to consider whether when added to your main Fund benefits you would exceed the Annual Allowance.