PSI25.3.1 - Flexibility in Pension Provision – Flexible Use of AVCs - Introduction

Prior to 30 June 1999, benefits paid for by AVCs had to come into payment at the same time as the benefits paid for by the employer and by the employee from any compulsory contributions, normally referred to as "employer funded benefits".

Since the flexibility arrangements were introduced on 30 June 1999, it has been possible to pay AVC benefits at any time between age 50 and 75 (or at an age earlier than 50 if a person leaves employment because of incapacity) regardless of whether the member retires or leaves pensionable service.

For example, the employee can:

• can choose to take AVCs at age 50 despite continuing to work in the same job with the same employer and continuing to accrue further employer funded benefits, or
• choose to defer taking his or her AVC benefit until age 75, despite having retired at, say, age 60 and having drawn employer funded benefits.