Additional Contributions

You must pay the normal contributions to the scheme but you may choose to pay additional contributions to increase your retirement income above the normal amount provided by the United Kingdom Atomic Energy Authority pension scheme.

You can normally contribute up to 15% of your pensionable pay to the United Kingdom Atomic Energy Authority pension scheme or you can contribute up to 100% of your gross annual income to the Additional Voluntary Contribution (AVC) arrangement with the Prudential (but you will still be required to pay the normal contributions to the CPS/PNISS . Tax relief will be given on your contributions paid from your gross taxable earnings in a year within HMRC limits.

Additional contributions to either the CPS or AVC arrangement qualify for full tax relief in the same way as the normal contributions you are required to pay to the United Kingdom Atomic Energy Authority final salary pension scheme.

The main features of Added Years and the AVC Scheme are as follows:

 - Added years

 - AVC scheme

See below for further details

- Your benefits are paid by the United Kingdom Atomic Energy Authority pension scheme and   calculated on final earnings and total service, including added years.

- Purchase of added years gives you increased pension, lump sum and family benefits in the same   proportions as your United Kingdom Atomic Energy Authority pension scheme benefits.

- If you die in service or are ill health retired the full number of added years applied for are credited.*

- Purchase is normally by periodical deductions from your salary.

- Periodical contributions are a fixed percentage of your salary payable to age 60. The percentage is   fixed by reference to your age when you start buying added years, being greater the older you are   when beginning the contract.

- You may cancel your agreement to buy added years but not on more than two occasions.

* This does not apply to added years contracts which began prior to 1985.

For further information about purchasing added years please see the attached Added years information. Please note the costs shown are based on a retirement age of 60.

Your additional benefits are provided by an independent AVC Provider, and are not linked to your final earnings. The level of benefits depends on the amount you have paid in and the interest or growth earned for you by your investments.

When you receive your benefits from the AVC fund, you can take up to 25% of your AVC fund as tax free cash and use the rest either to buy an annuity or take the remaining fund as cash which is taxed at your marginal rate of income tax. You can decide between a range of benefits, you don’t have to take one offered by the Prudential.

You decide how much or how little you want to pay into the AVC Scheme (subject to a minimum payment for new members of £20 per month).

You may choose to vary the level of your contributions to the AVC Scheme.

You may pay contributions in respect of earnings which are not pensionable under the United Kingdom Atomic Energy Authority Defined Benefit pension scheme.

Contributions to an AVC Scheme may be paid for over a long or short period.

You may transfer your benefits in the United Kingdom Atomic Energy Authority AVC scheme to another provider while remaining in the CPS main scheme.

Details about the United Kingdom Atomic Energy Authority Group AVC Scheme can be obtained by accessing Prudential’s website https://www.pru.co.uk/rz/gavc/

What if I transfer my United Kingdom Atomic Energy Authority final salary scheme benefit to a new pension arrangement?

If you resign before retirement age and you transfer your United Kingdom Atomic Energy Authority final salary scheme pension benefit to a different pension arrangement, your AVC Scheme fund will also be transferred to an arrangement of your choice. You can, however, chose to transfer your AVC fund without moving your benefits under the CPS, provided that the transfer is to another registered scheme or to an insurer by a transfer which is recognised as permissible by the Finance Act 2004.

What if I have a preserved award in the United Kingdom Atomic Energy Authority final salary scheme?

If your United Kingdom Atomic Energy Authority final salary scheme pension benefit is preserved then your AVC Scheme fund can remain invested in the United Kingdom Atomic Energy Authority Group AVC Scheme and paid when you reach your scheme retirement age unless you decide to take your AVC benefits before your normal pension age or defer crystallising your AVC fund benefits. The details regarding deferment are shown below. You can, however, chose to transfer your AVC fund without moving your benefits under the CPS, provided that the transfer is to another registered scheme or to an insurer by a transfer which is recognised as permissible by the Finance Act 2004.

What if I retire early?

If you are a member of the Group Additional Voluntary Contribution Scheme with the Prudential you can choose to crystallise your AVC fund benefits provided you are over age 55.

You may choose to defer purchasing an annuity provided the annuity is purchased by the time you reach age 75. You will need to contact the scheme administrators when you wish the annuity payments to commence.

If you wish to take advantage of the State Scheme Spreading Option (SSSO), which provides for a temporary annuity payable until State Pension Age the maximum age of deferment would be one year prior to reaching State Pension Age (i.e. presently deferment beyond the 59th birthday for women and the 64th birthday for men is not allowed). The SSSO allows you to use part or all of your fund under the Group AVC arrangement to buy a temporary pension equal to the value of 125% of the single person’s State basic pension or such lesser amount as your AVC fund will secure. Once purchased the rate of the temporary pension remains unchanged whilst in payment

For more details about deferment click here.

Single life annuity

If you select a single life annuity, the annuity will be paid for the remainder of your life and then payments will cease. This is a standard quotation which will be provided by Prudential at the time you retire.

Joint life annuity

If you decide to purchase a joint life annuity, part of your fund is used to provide a spouse pension in the event that you die before your spouse. The amount of contingent spouse benefit will depend on the level you select. For example you may select an annuity for your spouse which is half the rate of your annuity provided this is within HM Revenue and Customs limits. The cost will depend on the age of your spouse. For example if you spouse is much younger than you then the cost will be greater than for someone with a spouse who is the same age or older.

In the event that your spouse dies before you then the amount of fund given up to provide them with a benefit will not revert back to you.

If you are interested in a joint life annuity, you will need to ask your employee representative or the scheme administrators to obtain a quotation from Prudential. (In order to produce the quotation, Prudential will need to know your spouse’s date of birth and to have some idea of the level of contingent spouse benefit you wish to provide.)

Escalating annuity

AVC annuities do not normally increase whilst in payment. If you wish to have an escalating annuity you will need to ask your employee representative or the scheme administrator to obtain a quotation from Prudential. You will need to indicate by what percentage rate you wish the annuity to increase. You should be aware that if you purchase an escalating annuity the initial amount of annuity will normally be less than a non escalating annuity.

With-profits or unitised annuities

These are fluctuating annuities which follow market trends. You are advised to seek independent financial advice before deciding to purchase this type of annuity.

State scheme spreading option

This is a temporary annuity which is payable between the time you retire and the State Pension Age.

Once purchased the rate of the temporary pension remains unchanged whilst in payment. For further details regarding the State Scheme Spreading Option click here

At retirement for members below State Pension Age Prudential produce a State Scheme Spreading Option quotation as standard along with the single life annuity quotation provided you have more than a year to State retirement age.

Quotations provided by Prudential usually contain details of a five year guarantee period. This means that if you die within five years of the annuity being set up the balance of the payments in the form of a lump sum will be paid to your nominee or in the absence of a valid nominee to your legal personal representative.

If you select a guarantee period of more than five years then in the event of your death the payments would continue to be paid to your nominee or in the absence of a valid nominee to your legal personal representative in the form of an annuity until the end of the guarantee period.

There is provision in the AVC Scheme to purchase an annuity on the open market; using your AVC fund to purchase an annuity with an alternative company to the Prudential, United Kingdom Atomic Energy Authority’s Group AVC Scheme provider. You may wish to consider seeking financial advice before purchasing an annuity including whether to take an open market option.