Additional voluntary contributions (AVCs)

Additional voluntary contributions (AVCs)

If you paid AVCs while you were an active member these are held in a separate account. You can use the value of your AVCs to provide additional benefits at retirement. You will receive a statement each year showing you the current value of your AVCs.

You can also use your AVCs to reduce the amount of pension you need to exchange to fund a a tax-free lump sum (known as a ‘pension commencement lump sum’), if you choose to receive one. Any pension quotations you receive will include information about your AVCs, and the options available to you.

Your additional voluntary contributions (AVCs) – have you reviewed where they’re invested?

If you have paid AVCs into the HP Retirement Benefits Plan, they are more than likely to be invested with Legal & General.

It may have been some time since you last reviewed where these AVCs are invested. It is very important that you regularly review investment decisions, to make sure they remain suitable for your needs.

If you have not made an investment choice in the past, your AVCs will be invested in the Legal & General Cash Fund. This fund may be suitable for members who are close to retirement, as the value of the Cash Fund is likely to be more stable than other types of investment. However, if you’re a number of years away from retirement, the Cash Fund may not be suitable for you.

You are able to choose your preferred investments using the individual funds (e.g. equities, fixed interest, ethical, etc). Alternatively, you can choose from one of Legal & General’s ‘lifestyle profiles’. You can change the way your AVCs are invested at any time.

If you are invested in a lifestyle profile, your investments will be automatically moved over time, as these strategies are designed to reduce your level of investment risk as you approach retirement. The way in which investments are switched varies depending on the particular lifestyle profiles. The three different lifestyle profiles are designed to cater for members who would like to:

(i) take all their AVCs as a cash lump sum;

(ii) purchase an annuity; or

(iii) disinvest their AVCs as and when they need to during retirement (known as “drawdown”).

You can find out more about the lifestyle profiles, check where your AVCs are invested and move between funds by visiting your Legal & General online account: www.landg.com/mya

Alternatively, you can contact Legal & General by calling 0345 070 8686