Additional voluntary contributions

Paying AVCs

If you’d like to give your pension a boost and increase your benefits at retirement, you can choose to pay additional voluntary contributions (AVCs). These are saved on a defined contribution (DC) basis and are paid into your personal AVC fund account, which you can use flexibly at retirement in a way that suits you.

Putting your money to work

You can choose how you’d like your AVCs to be invested using the range of funds that the Trustee has made available – either the lifestyle strategy or the self-select funds.

The lifestyle strategy

Using the Plan’s lifestyle option, you can choose investments that target how you want to use your AVCs at retirement: annuity, income drawdown or cash. If you don't make a decision, your AVCs will be invested in the default option, lifestyle cash focused. 

What does lifestyling do?

When you’re a long way from retirement, your AVC fund account is invested in funds which aim to maximise investment growth. Then, in the years as you get closer to your target retirement age, your money is automatically and gradually switched from growth investments (equities, also called shares) into less volatile investments like bonds and cash. This helps protect the value of your AVCs from any sudden changes in market conditions when you’re close to retirement.

Your target retirement age

It’s really important to choose a target retirement age if you’re using the lifestyle option, because the switching process begins based on when you plan to retire. If you haven’t selected a target retirement age, we’ll assume that it’s the same as your State pension age. You can change your target retirement age at any time.

Please note, your normal retirement age from the DB section is 65, so there may be a gap between when you can take your DB pension and access your AVCs if you do not update your target retirement age.

If you’ve left your target retirement age at 68, but you’re actually hoping to retire earlier, it could mean that your AVCs are still invested in a growth fund too close to your retirement. If there’s a sudden downturn in the financial markets, your AVCs might not have enough time to recover.

Similarly, if you’ve chosen age 55, but find you want to continue working a bit longer, your AVCs will have started switching into less volatile funds too soon and you might miss out on some investment growth.

The self-select funds

As an alternative to the lifestyle option, you may prefer to make your own investment choices using the range of 12 self-select funds. These are suitable if you have the time and knowledge to manage your own investments. You can make changes to your investments at any time via Manage my pension

You can read more about all your investment options in our investment guide or watch the video to understand more about investment risk. 

The following funds are available in the self-select range:

Cummins AAA-AA-A corporate bonds all stocks index fund
Cummins Accelerated growth fund  
Cummins Cash fund 
Cummins Ethical global equity fund 
Cummins Moderate growth fund
Cummins Pre-retirement fund 
Cummins Property fund 
Cummins UK equity fund 
Cummins World emerging markets equity fund 
Cummins World equity fund (hedged)
Cummins World equity fund (unhedged)
HSBC Islamic titans fund  

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