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additional regular contributions
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Additional Regular Contributions (ARC's)
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ARCs are used to purchase a defined benefit from the pension scheme in the form of a known amount of extra pension. With this method of increasing benefits yiou known what you are going to get for your money in advance.
Buying additional pension was introduced from April 2008 and allows you to pay additional regular contributions to buy extra scheme pension either just for yourself or yourself and any survivor. Additional pension must be bought in multiples of £250 up to a maximum of £5000. Any additional pension that you buy will receive cost of living increases from the date of the first contribution you make.
You can choose the period over which you pay for the additional pension. This must be in whole years and ranges from a minimum of 1 year to a maximum period of when you reach age 65. Unfortunately this means that if you are already aged 64 you cannot use the ARCs facility to buy any additional pension.
You can use up to 100% of your pensionable pay to purchase additional pension. Your payment for the additional pension will be deducted directly from your pay and if you are a tax payer you will automatically be eligible for tax-relief at source. So in real terms, if you are a basic rate tax payer, buying additional pension will only cost you 80% of your monthly payment.
Here are a couple of quick reference tables to give you an idea of the costs and examples of the periods you can choose.
The monthly payment for a male member wishing to buy an extra £250 annual pension
- Without survivor pension
With survivor pension
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Length of contract ranging from the minimum to maximum period allowed
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1 year |
9 years |
19 years |
29 years |
39 years |
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25
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£104.14 |
£14.15 |
£8.69 |
£7.30 |
£6.82 (*) |
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£115.56 |
£15.71 |
£9.64 |
£8.10 |
£7.57 (*) |
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35
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£145.99 |
£19.91 |
£12.37 |
£10.63 (*) |
/ / / / / / / / / / |
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£161.60 |
£22.04 |
£13.69 |
£11.76 (*) |
/ / / / / / / / / / |
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45
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£202.73 |
£28.31 |
£18.48 (*) |
/ / / / / / / / / / |
/ / / / / / / / / / |
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£223.50 |
£31.22 |
£20.38 (*) |
/ / / / / / / / / / |
/ / / / / / / / / / |
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55
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£272.34 |
£41.23 (*) |
/ / / / / / / / / / |
/ / / / / / / / / / |
/ / / / / / / / / / |
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£299.38 |
£45.33 (*) |
/ / / / / / / / / / |
/ / / / / / / / / / |
/ / / / / / / / / / | (*) Maximum period to age 65
The monthly payment for a female member wishing to buy an extra £250 annual pension
- Without survivor pension
With survivor pension
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Age at start of contract
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Length of contract from minimum to maximum period allowed
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1 year |
9 years |
19 years |
29 years |
39 years |
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25
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£117.96 |
£16.04 |
£9.87 |
£8.30 |
£7.76 (*) |
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£122.98 |
£16.73 |
£10.29 |
£8.65 |
£8.09 (*) |
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35
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£164.24 |
£22.47 |
£13.97 |
£12.02(*) |
/ / / / / / / / / / |
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£171.14 |
£23.41 |
£14.56 |
£12.52 (*) |
/ / / / / / / / / / |
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45
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£225.45 |
£31.46 |
£20.61 (*) |
/ / / / / / / / / / |
/ / / / / / / / / / |
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£234.10 |
£32.67 |
£21.40 (*) |
/ / / / / / / / / / |
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55
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£302.93 |
£46.35 (*) |
/ / / / / / / / / / |
/ / / / / / / / / / |
/ / / / / / / / / / |
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£312.88 |
£47.88 (*) |
/ / / / / / / / / / |
/ / / / / / / / / / |
/ / / / / / / / / / | (*) Maximum period to age 65
If you wish to purchase more than the minimum of £250 you can calculate the month payment (remember that the amount of additional pension bought must be in multiples of £250) by simply multiplying the monthly payment by the multiples to be bought. For example a female member aged 35 wishing to purchase £1000 additional pension, with a survivor pension, over 9 years will pay a monthly payment of £93.64 (£23.41 x 4).
Before an election to pay additional contributions can be accepted you will be required to produce, at your own expense, a medical report from a doctor stating that you are in reasonably good health. This is because if you have to retire through ill health or you die in service any outstanding payments for additional pension will be deemed to be fully paid. |
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