DB Members

Additional Voluntary Contributions (AVCs)

HMRC

Plan benefits and AVCs are considered together when calculating the limits on the benefits you may receive.

Benefits on leaving

Your AVC benefits will be treated in the same way as your benefits from the Plan. Currently, you can choose a deferred pension, a transfer value, or, an immediate pension if you are over minimum pension age. If you defer your pension your AVC account will stay invested and investment returns will continue to apply.

Retirement benefits

When you retire you can use the value of your AVC account to provide benefits in addition to those provided by the Plan. Currently you can take your AVC account as tax free cash subject to the overall limit of 25% of the value of your Plan pension and AVCs.  Alternatively, you can defer taking benefits from your AVCs until a later date up to age 75. Your choices currently may include tax free cash as well as additional pension for you, your spouse or dependants. The terms on which you can use your AVCs are set by the Trustees on the advice of the actuary and will be notified to you at retirement. Whatever your choice of benefits, these decisions need not be made until retirement.

Alternatively, you can use your AVC account to buy an annuity from a provider such as an insurance company. The provider would then pay your AVC pension. You may want to consult an independent financial adviser to help you decide if this is the best option for you.

Investment choices

Whichever AVC provider you chose it is important to keep a close eye on your investments.  If your AVCs are not providing the returns you need you may wish to consider changing your investment choices.

Your DC Choice Fund

If you joined the DC Section of the Plan (DC Choice) and your DC fund is less than £7,500 when you retire purchasing an annuity may be difficult.  Depending on the circumstances, you may be able to take your DC Choice account as a lump sum.  If not, you may transfer it into the DB Section of the Plan, where it will be treated as if it were an AVC.  The figure of £7,500 will be kept under review and may go up or down.

 

Mercer

If you have any questions about pensions please contact the pensions administrators:

Mitchells & Butlers Pensions
Mercer
4 Brindley Place
Birmingham
B1 2JQ

Telephone: 0845 850 0981
Email: mbplc@mercer.com

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