Pension Schemes – Employees Print

A member of an occupational company pension scheme had the option of using AVC (Additional Voluntary Contributions), FSAVC (Free Standing Additional Voluntary Contributions) contracts or in certain circumstances Personal and Stakeholder Pensions to boost provision for retirement. These contracts had stringent limits and some individuals were unable to use these contracts to boost their benefits. The current pension regime allows what is known as full concurrency whereby a variety of pension schemes may be used on a mix and match basis to provide for retirement planning.

Whilst many of the limits on pensions have been removed, trustees of company schemes (especially final salary based schemes) continue to offer benefits based on some of the old rules. For example they may offer a final salary scheme with a maximum benefit of 2/3rds final salary after a pre-determined period of time. These limits were once Revenue prescribed. Under the new rules many schemes can pay benefits in excess of this but will chose not to on the grounds of cost.

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