Pension EDCs

AndyPK

Could someone tell me what EDCs are please?  Is this simply my contribution to the pension? or is it something else in addition ? 

I'm trying to fill out a form!

"Employee Directed Contributions (EDCs)

EDCs are made by Salary Sacrifice and must be a whole percentage of your pensionable salary.  If you wish to pay EDCs in addition to your core payment into the plan, please indicate the percentage in the box below."

AVC's.... etc

Albermarle

Is this an internal form for your employer ?

If so presumably there is a minimum contribution you have to make to get the maximum employer contribution, and this is the 'core payment'
If you want to increase your contribution beyond the core payment then this would be the EDC. I think....

dunstonh

I haven't actually come across that before.  So, I am guessing it is what a particular employer or provider is calling them.

It sounds like is the bit you want to pay on top of the default but using salary sacrifice as the method.

AVC's.... etc

An AVC is a type of pension plan.

AndyPK

Yes

Are great. I think that makes sense now. 
Yes it's got their % and my %  (which now looking at it are fixed values) 

The EDC must be what I want to put in addition

AndyPK

Ok, I've put a figure in that box.

Is it worth me adding any AVC's ?  What is the advantage of that method ? 

Albermarle

AndyPK said:

Ok, I've put a figure in that box.

Is it worth me adding any AVC's ?  What is the advantage of that method ? 

The EDC is extra % contribution from you .
An AVC is extra % contribution from you .

So presumably one and the same thing assuming they are going into the same pension? 

Unless there is a separate pension from the main one ? If so you will have to explain how it all works in more detail to avoid confusion.

AndyPK

Same pension, on the same form. 

I think avc is done by salary deduction. Maybe that is the difference. 

Albermarle

AndyPK said:

Same pension, on the same form. 

I think avc is done by salary deduction. Maybe that is the difference. 

In which case better to make all contributions via salary sacrifice ( EDC's in your company's jargon) as you gain the NI saving.

Scrudgy

Maybe your companies EDC is what my company calls SSS (self select strategy) as using SSS I direct where my contributions go.

If I do nothing, all employer and employee contributions go into a default lifestyling scheme which is a little safe and mediocre
If I click the box for SSS, then I take over the investment strategy where I choose the investments based on my risk attitude.

After that, I also have AVC options to save more, which will follow whatever lifestyle or self select strategy I have chosen previously.