Additional Pension Contributions (APCs)

Printer-friendly versionPrinter-friendly version
If you are in the main section of the LGPS, you can pay additional contributions to buy extra pension. The most that you can buy is £8,344 of extra yearly pension. You can pay for the extra pension by paying Additional Pension Contributions (APCs) over a number of complete years or by paying a lump sum.
 
The cost of buying extra pension depends on your age, how much yearly pension you buy and how you choose to spread the payments. The cost of buying extra pension is reviewed every few years. If you buy extra pension by paying regular contributions, the amount you pay each pay period may change in the future.  
 
You cannot buy extra pension if you are in the 50/50 section of the LGPS.
 
If you wish to buy extra pension by paying a lump sum, there are two ways that you can do this:
 
  • through your pay – if you pay tax, you will receive tax relief through the payroll
  • pay Merseyside Pension Fund directly – you will need to arrange tax relief with HMRC. You can do this via your self assessment tax return or by contacting HM Revenue and Customs.
 
If you pay Additional Pension Contributions over a number of years, the regular contributions would be taken from your pay, just like your normal pension contributions. Your normal contributions and additional contributions are deducted before your tax is worked out. If you pay tax, you will receive tax relief automatically through the payroll. Tax relief is available on all pension contributions up to 100% of your taxable earnings.
 
The shortest period that you can spread APC payments over is 12 months. The maximum is the number of years to your Normal Pension Age. Your Normal Pension Age is linked to your State Pension Age. If you are a year or less from your Normal Pension Age, you can only pay by lump sum.
 

Buying extra pension

When you apply to buy extra pension, the Fund will issue you with a certificate which must be signed by a registered medical practitioner following a medical examination. This will certify that you are 'in reasonably good health'.
 
Failure to obtain this signed certificate will mean that your application to buy additional pension is invalid and cannot proceed.
 
For more details about buying extra pension and to receive a quotation, please sign and complete the ‘Buy extra pension calculator’ form on the LGPS members website to confirm the details of the APC contract you wish to begin.
 
You can email us the completed document: mpfadmin@wirral.gov.uk, or post to us at the following address:
 
Merseyside Pension Fund,
Castle Chambers,
43 Castle Street,
Liverpool
L2 9SH
 
PLEASE NOTE: There is a section on the personal details page stating ‘percentage your employer has agreed to pay’, but your employer would not usually contribute towards your APC. Your employer would only elect to pay towards your APC if you were leaving your employment on grounds of redundancy or business efficiency. You can ask your employer about their policy on awarding extra pension.
 
 

Employer awards of extra pension

Your employer can award you with extra pension of up to £8,344. They can award this to you while you are an active member. They can also award you extra pension within six months of leaving your job, but only if you leave because of redundancy or business efficiency. This is a discretion. You can ask your employer about their policy on awarding extra pension.
 

Taking your extra pension

Any extra pension that you or your employer has paid for is attached to your LGPS benefits. The extra pension will be paid to you when you take your main LGPS pension. The extra pension is payable from your Normal Pension Age. It will generally be reduced if you take your pension early, or increased if you take it later. Different rules apply if you retire because of ill health.