LGPS Standard AVC's and Shared AVC's

Maria2512

Hi,

Does anyone know why you can put all your Pensionable pay into a standard AVC but not into a Shared cost AVC (Salary Sacrifice).

Thanks

Marcon

Maria2512 said:

Hi,

Does anyone know why you can put all your Pensionable pay into a standard AVC but not into a Shared cost AVC (Salary Sacrifice).

Thanks

You can't salary sacrifice below minimum wage.

Maria2512

Marcon said:

Maria2512 said:

Hi,

Does anyone know why you can put all your Pensionable pay into a standard AVC but not into a Shared cost AVC (Salary Sacrifice).

Thanks

You can't salary sacrifice below minimum wage.

Marcon said:

Maria2512 said:

Hi,

Does anyone know why you can put all your Pensionable pay into a standard AVC but not into a Shared cost AVC (Salary Sacrifice).

Thanks

You can't salary sacrifice below minimum wage.

But you can under a standard AVC!, seems quite odd to me. Whats the reasoning?

daveyjp

Because standard AVC isn't salary sacrifice.

Under salary sacrifice the employer pays the bulk of the contribution directly to the AVC provider (except for £1, hence shared cost), so that element of the salary is never paid to the employee.  As all employees have to earn minimum wage there is a maximum amount which can be paid under SS.

Under standard AVC the employee pays the contribution from salary which has already been paid by the employer and shows a deduction from salary.

Maria2512

@daveyjp Thanks for that