AVC's in company fund or invested elsewhere

sue_c_3

My company has just changed our pension scheme so that it is still based on salary but not final salary. We will earn 1/60 of our current salary and then that amount will grow by a maximum of 3% until retirement. I have over the last few years paid AVC's into the Company fund to increase my accrual rate from 60ths to 45ths. Now the pension entitlement has changed I am wondering if I am better to invest in an outside pension scheme the amount that I would have put into avc's .... any suggestions of which company/ies to approach for quotes would be appreciated.

ReportInvestor

Hi Sue and welcome to the site .

There is no reason for the AVC scheme to change in these circumstances.

If it was good when you chose it, it is probably good now.

Let us know who it is invested with, and in what fund(s) for a further opinion or five.

dunstonh

Small note on AVCs. They are tied to the commencement date of the occupational pension scheme. They are not useful for those planning early retirement. If the occ scheme wont let you have benefits early, then the AVC won't either.

You have to weigh up the benefits with the inflexiblity.

Pal

If this is the scheme that I think it is, the AVCs being paid uplift the benefit accrual rate from 1/60th to 1/45th.

As a result there are no investment fund choices or issues to worry about, and lack of flexibility on retirement is part and parcel of that type of AVC.

Personally I would stick with the 1/45ths while it is available.