Boosting your pension

Once you have decided what you want to purchase, having used the APC calculator you should either print off or download the APC application form (LGS27A or LGS27B).  If you are buying ‘lost’ pension you should contact your employer first so they can tell you your amount of lost pensionable pay.

If you are buying additional pension:

You should complete and forward the application form (LGS27A) to NILGOSC along with your payment for a Good Health Medical.  The current fees for a Good Health Medical are £126 (2021/22 figure).

We will advise you of the date of your appointment when we receive your application form and payment for the medical.  If you pass the Good Health Medical we will write to you and your employer confirming the additional monthly deductions that should be taken from your pay and the period you will be paying over or the lump sum amount if you are making a one-off payment.

You can make a one-off payment either via your pay or directly to NILGOSC.  If you make payment directly to NILGOSC you will need to reclaim any tax relief directly with HM Revenue and Customs (HMRC).

If you are Covering pension ‘lost’ through authorised unpaid leave due to industrial action:

You should complete and forward the application form (LGS27B) to your employer who will complete their section of the form and forward it on to NILGOSC.

On receipt of the completed application form NILGOSC will advise both you and your employer of the additional monthly deductions that should be taken from your pay and the period you will be paying over or the lump sum amount if you are making a one-off payment.

You can make a one-off payment either via your pay or directly to NILGOSC.  If you make payment directly to NILGOSC you will need to reclaim any tax relief directly with HM Revenue and Customs (HMRC).

Why do I have to have a medical and do I have to pay for it?

If you are buying additional pension to boost your pension benefits you must complete a Good Health Medical. Therefore, NILGOSC needs to know that you are in good health and unlikely to retire on ill-health grounds before it will agree to your purchase of additional pension.  You must pay the cost of the Good Health Medical.

You do not have to have a Good Health Medical if you are buying additional pension to cover ‘lost’ pension due to authorised unpaid leave or industrial action.

You can pay for additional pension either by regular contributions or by lump sum.  The cost depends on:

  • your age at the date the lump sum is paid or the contributions start
  • the period you wish to pay over
  • your normal pension age

You can calculate the cost of buying additional pension using the APC calculator.  This calculator allows you to consider the cost over various payment periods.  

Additional Pension Calculator

If you decide to pay by regular contributions the contract must be for at least one full year or a full number of years.  Contracts may be subject to a minimum monthly contribution rate set by NILGOSC.

You cannot start to buy additional pension with regular contributions if you are within one year of your normal pension age.  However, you could still pay by lump sum.

Shared Cost Additional Pension Contributions (SCAPCs)

If your employer chooses to contribute towards the cost when you are buying additional pension to increase your benefits, this is known as a Shared Cost Additional Pension Contribution (SCAPC) contract.  This is an employer discretion and you can ask your employer about its policy on Shared Cost APCs.

You can pay for additional pension either by regular contributions or by lump sum.  The cost depends on:

  • your age at the date the lump sum is paid or the contributions start
  • the period you wish to pay over
  • your normal pension age

You can calculate the cost of buying additional pension using the APC calculator.  This calculator allows you to consider the cost over various payment periods.  

If you decide to pay by regular contributions the contract must be for at least one full year or a full number of years.  Contracts may be subject to a minimum monthly contribution rate set by NILGOSC.

You cannot start to buy additional pension with regular contributions if you are within one year of your normal pension age.  However, you could still pay by lump sum.

Shared Cost Additional Pension Contributions (SCAPCs)

If your employer chooses to contribute towards the cost when you are buying additional pension to increase your benefits, this is known as a Shared Cost Additional Pension Contribution (SCAPC) contract.  This is an employer discretion and you can ask your employer about its policy on Shared Cost APCs.

The additional pension is paid at the same time as you receive your main Scheme benefits.

If you retire early and draw your benefits before your Normal Pension Age or you are retired on redundancy or business efficiency grounds before your Normal Pension Age the additional pension that you have bought will be reduced for early payment.

If you draw your benefits on flexible retirement you can, if you wish, also draw the additional pension you have paid for, although it will be reduced for early payment.  If you do so, your APC contract will cease, although you can take out a new one.

If you are awarded ill-health retirement, then the remaining amount of any APC or SCAPC contract you are paying is deemed to have been paid in full and is paid along with your main Scheme benefits.

If you draw your pension after your Normal Pension Age your additional pension will be increased as it is being paid later.

On retirement you can exchange some of the additional pension for tax-free cash in the same way as your main Scheme pension.

If you die in service no extra benefits from your APC contract will be payable as it was only a contract to provide additional pension for you.

The additional pension is paid at the same time as you receive your main Scheme benefits.

If you retire early and draw your benefits before your Normal Pension Age or you are retired on redundancy or business efficiency grounds before your Normal Pension Age the additional pension that you have bought will be reduced for early payment.

If you draw your benefits on flexible retirement you can, if you wish, also draw the additional pension you have paid for, although it will be reduced for early payment.  If you do so, your APC contract will cease, although you can take out a new one.

If you are awarded ill-health retirement, then the remaining amount of any APC or SCAPC contract you are paying is deemed to have been paid in full and is paid along with your main Scheme benefits.

If you draw your pension after your Normal Pension Age your additional pension will be increased as it is being paid later.

On retirement you can exchange some of the additional pension for tax-free cash in the same way as your main Scheme pension.

If you die in service no extra benefits from your APC contract will be payable as it was only a contract to provide additional pension for you.

If you die in service then no benefits from your Additional Pension Contributions (APC) contract will be payable. This is because the amount of extra pension you buy is for you only. It is not used in the calculation of the lump sum death grant or any survivor’s or children’s benefits.

If you die after leaving but before retirement and therefore have deferred benefits, then a lump sum of five times the extra annual pension paid for will be payable.

If you die whilst in receipt of your pension and are under age 75, a lump sum of 10 times your extra annual pension minus any extra pension already paid to you will be payable.

Covering pension ‘lost’ due to authorised unpaid leave

If you are off work with permission and are receiving reduced or no pay e.g. a few days of unpaid leave or a career break, you and your employer must pay pension contributions for the first 30 days of your absence. If your absence continues for more than 30 days, the period from day 31 onwards will not count towards your pension unless you elect to pay APCs to cover it. Pending clarification from the Department, this ’30 day rule’ will not apply to additional maternity leave (or similar family leave). Therefore, any period of additional maternity, shared parental or adoption leave will not count towards your pension unless you elect to pay APCs to cover the period.

If you are buying additional pension to cover pension ‘lost’ due to authorised unpaid leave your employer must cover 2/3rd of the cost if you choose to take out an APC contract within 30 days of returning to work, or such longer period as the employer may allow.  Your employer will only cover lost pension for a period of up to 36 months.  Your employer will not contribute towards the cost if you make an election after 30 days of returning to work, or such longer period as the employer may permit.

The amount of ‘lost’ pension that you can buy is calculated as:

1/49th (1/98th If you were in the 50/50 section)  x lost pensionable pay for period of absence

Buying pension ‘lost’ due to industrial action

If you are absent from work due to industrial action this will not count towards your pension unless you elect to pay Additional Pension Contributions (APCs) to cover the period.

The amount of ‘lost’ pension that you can buy is calculated as:

1/49th (1/98th If you were in the 50/50 section)  x lost pensionable pay for period of absence

The cost of buying this ‘lost’ pension is paid fully by you and there is no time limit on the period over which you can choose to buy pension that was ‘lost’ due to industrial action.

Yes, it is possible to give up additional pension at retirement to provide extra lump sum, subject to tax limits.

It is possible that your monthly payments could change in the future.  The actuary may change the rates or the government could change the method of increase.  These changes would affect both new applicants and members who are already buying additional pension.  These changes will normally apply from 1 April following the change and we will let you know the change beforehand.

At the end of every Scheme year the proportion of additional pension that you have bought in that year is added to your pension account.  The value of pension in your pension account is revalued each year to keep up with cost of living increases.  Once in payment the additional pension will get the same increase as the rest of your pension and go up in line with Pensions Increase orders each year.

Yes, as long as the total amount does not exceed £7,163 per year (2021/22 limits).  It should be remembered that the cost of any later purchases of additional pension will depend on your age at that time.

If you are on unpaid leave or child-related leave you must continue to make the contributions to buy additional pension.

If you stop contributing, leave or retire before the end of the payment period you will receive a pension based on the contributions made up until the date they ceased.  If you retire early on ill-health grounds the contract is deemed to have been paid in full.

No.  Purchases of additional pension have no effect on your 85 year rule date.

You can transfer AVCs or Free-Standing AVCs into the Scheme to buy extra Scheme pension.  You have only 12 months to opt to transfer your AVC benefits unless NILGOSC allows you longer.