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(This means you are no longer building up pension in the Scheme)

CHANGE SCHEME

AVCs

What are AVCs?

While you were an active member you might have boosted your pension by making Additional Voluntary Contributions (AVCs) to the AVC Section.

The AVC section is a defined contribution (DC) arrangement. So if you have an AVC account, your retirement benefits will be determined by:

  • Your contributions to your AVC Account
  • The Company’s contributions to your AVC Account
  • Any investment returns from your AVC fund over time
  • The cost of purchasing any pension at retirement.

AVC investment choices

As the AVC section is a DC arrangement, you’ll need to consider your investment options.

The AVC section offers two styles of investment:

  • BOC Lifestyle – the Trustee makes all the decisions about which funds to invest in and when to change between them for you. Your AVC Account is invested according to a strategy that depends on your selected retirement age. When you are eight years from retirement, your AVC investments will start to move into lower risk funds depending on the Lifestyle pathway you decide. You’ll have to choose the pathway that suits you best depending on whether you want to take your AVC savings at retirement as an annuity, income drawdown, or cash.
  • BOC FreeChoice – you choose from a selection of available funds and you are responsible for ensuring that the strategy you use is appropriate for your particular circumstances at any time. You can include BOC Lifestyle in your fund selection.

There are risks and rewards associated with each type of investment. Read Your guide to AVC investments and the investment manager's fund factsheets before you make your investment choices. This will help you decide which option is most appropriate for you. You must also review your investments regularly to ensure they continue to be appropriate for you and your circumstances. This includes keeping your Target Retirement Date up to date.

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If you would like to change the way your past contributions are invested download a Change of AVC Investment form.

Approaching retirement

Taking your AVC fund

When you retire, you can take up to 25% of the combined value of your pension from the Scheme and your AVCs as a one-off tax-free cash sum (within the Lifetime Allowance). If you take tax-free cash, it will automatically be taken from your AVC Account first, rather than your Scheme benefits, so it will be of maximum benefit to you.

If you do not want to take tax-free cash, or if your AVC Account exceeds the maximum tax-free cash allowed, you can use your entire AVC Account to buy extra pension either through the BOC Pension Scheme or on the open market.

You can also take your AVC fund at a different time to your BOCPS benefits. If you do so, only the first 25% of AVCs would be tax-free. You would pay tax on the remaining 75% and the tax-free lump sum will be lower when you take your BOCPS benefits.

Your countdown to retirement

  • If you’re eight years or less away from your Normal Retirement Age (NRA) which is age 65 unless you choose your own Target Retirement Age, or your employment contract states otherwise, you will need to choose how you would like your AVC fund to be invested as you get closer to accessing your retirement savings.
  • As you saved into your AVC Account, your savings will have been invested either through ‘BOC Lifestyle’ funds, ‘BOC FreeChoice’ funds, or both. For more information about how this works, see ‘AVC investment choices’ above.
  • When you’re eight years or less away from your NRA, you need to complete an AVC Countdown to retirement form to tell us how you’d like to invest your Account before retiring.

If you’re in BOC Lifestyle

In BOC Lifestyle, the Investment Manager appointed by the RS Plan Trustee decides which funds to invest your Account in and when to change between them.

  1. Download the AVC Lifestyle Countdown to retirement booklet and consider your options carefully.
  2. Complete and return an AVC Countdown to retirement form.
  3. If you change your mind after submitting your form, you can still send a Change of AVC investment form at any time.

If you’re in BOC FreeChoice

In BOC FreeChoice, you choose which funds to invest in and when to change between them.

  1. Download the AVC FreeChoice Countdown to retirement booklet and consider your options carefully.
  2. Complete and return an AVC Countdown to retirement form.
  3. If you change your mind after submitting your form, you can still send a Change of AVC investment form at any time.

Want to know more about investments?

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If you’re unsure about what the different investment terminology means, or want to know more about the different funds that are available to you, read Your guide to AVC investments.

Keeping you up to date

You will receive an annual benefit statement for your AVC savings. Your statement includes:

  • the value of your AVC Account
  • any contributions made since your last statement
  • an annual pension estimate.
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