PSI25.3.6 - Flexibility in Pension Provision – Flexible Use of AVCs- AVC Benefits Paid with Employer Funded Benefits

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

If a member chooses to take AVC benefits at the same time as employer funded benefits, the member may select (where scheme rules allow):

• To purchase an annuity derived from both employer funded benefits and AVC funds
• To purchase an annuity derived from the employer funded benefits and take income drawdown from the AVC fund
• To purchase an annuity derived from the AVC fund and take income drawdown from the employer funded benefits
• To take income drawdown from both employer funded benefits and AVC funds
• To take part annuity and part drawdown from either source

The existing rules on any entitlement to a lump sum will apply.