Key Features of the Local Government Additional Voluntary ... · PDF file2 Key Features of the...

Key Features of the Local Government Additional Voluntary Contributions (AVC) Scheme

for England & Wales

Please read this document along with your personal illustration (if you have one) before you decide to buy this plan. It’s important you understand how the Local Government AVC Scheme works, the benefits and associated risks.

2 Key Features of the Local Government Additional Voluntary Contributions (AVC) Scheme for England & Wales

Welcome

We would like everyone to find it easy to deal with us. Please let us know if you need information about our plans and services in a different format.

All our literature is available in audio, large print or braille versions. If you would like one of these please contact us using the details on the last page.

Contents

About the Local Government AVC Scheme 4

Its aims 4

Your commitment 4

Risks 4

Other documents you should consider reading 5

Questions & Answers 6

Is the Local Government AVC right for me? 6

How flexible is the Local Government AVC? 6

How much can I pay into the Local Government AVC? 6

Can I transfer money in? 7

Where are my payments invested? 7

Can I change my investments? 7

What if I stop making payments? 8

Can I transfer my pension? 8

Can I combine my benefits? 8

What are the charges? 9

What’s a Market Value Reduction? 11

How long can I pay into the AVC? 12

Key Features of the Local Government Additional Voluntary Contributions (AVC) Scheme for England & Wales 3

Welcome

The Financial Conduct Authority is a financial services regulator. It requires us, Prudential, to give you this important information to help you decide whether our Local Government AVC Scheme is right for you. You should read this document carefully so that you understand what you are buying, then keep it safe for future reference.

What might I get back? 13

When can I take my benefits? 13

What choices will I have when I take my benefits? 14

Where can I get guidance about what to do with my pension? 14

What about tax? 15

How will I know how my plan is doing? 16

What happens to the Prudential Local Government AVC if I die? 16

Can I use my AVC to provide optional Life Cover? 17

What if the Local Government AVC is not right for me? 17

What happens if I leave service? 18

Other information 19

How to contact us 22


Its aims What this plan is designed to do• Tohelpyousaveforretirementinatax-

efficientwaybyprovidingaccesstoawiderangeofinvestmentoptionstomatchyourinvestmentobjectivesandattitudetoinvestmentrisk.

• Itcanalsobeusedtoprovideyouwithoptionallifecover.

Your commitmentWhat we ask you to do• Tomakeregularand/orlumpsum

paymentsintoyourplan.• Toleaveyourmoneyinvestedina

pensionproductuntilyouarereadytotakeyourbenefits.Theearliestageyoucannormallytakebenefitsiscurrently55.

• Youneedtochooseinvestmentstosuityourneedsandkeepthemunderregularreview.

About the Local Government AVC Scheme

ThePrudentialLocalGovernmentAVCSchemeisanarrangementwhichallowsyoutomaketax-efficientadditionalsavingsontopofyourexistingLocalGovernmentPensionScheme.

Takingoutthisproductwillmeetthedemandandneedofamainschemememberwishingtomakeadditionalmoneypurchasepensionprovisiontomeettheirfinancialrequirementsinretirement.

Ifyouarenotsurewhetherthisplanisrightforyou,pleasespeaktoafinancialadviser.

WhenwerefertoyourAVCNormalPensionAge,thisisthesameasyournormalpensionageinyourLocalGovernmentSchemeasatthedateyoujointheAVC.

Risks What you need to be aware ofInvestingmoneycanberewarding,butit’snotwithoutrisk.We’vehighlightedthekeyrisksyoushouldconsiderbeforeinvestinginthisproduct.• Thevalueofyourplancangodownas

wellasupandmayevenfallbelowtheamountyouinvested–whatyougetbackisnotguaranteed.

• Inflationwillreducewhatyoucanbuyinthefuture.

• Levelsofriskandpotentialinvestmentperformancedifferdependingonthefundsyouchoose.PleasereadyourFund Guideformoreinformation.

• IfyouwithdrawmoneyfromourWith-ProfitsFundwemayreducethevaluebyapplyingaMarketValueReduction.Weexplainthisinthesection“What’saMarketValueReduction?”.

• Theremaybeadelayinthebuying,switchingorsellingofanyinvestment.Youwillbetoldifthisapplies.Weexplainthisinthesection“Wherearemypaymentsinvested?”.


Other documents you should consider reading

This document gives you key information about the Prudential Local Government Additional Voluntary Contributions (AVC) Scheme for England & Wales. If you want more detail on specific points, please read the following documents. We have highlighted when they are relevant throughout this document.

They are all available from your adviser, on our website at www.pru.co.uk/localgov or direct from us. Our contact details are on the last page.

• Fund GuideThis explains your investment choices.

• Your With-Profits Plan – a guide to how we manage the FundProvides more information on how our With-Profits Fund works, and our current approach to managing it.

• Market Value Reduction – a clear explanationGives more information on Market Value Reductions.


Questions & Answers

Is the Local Government AVC right for me? Ifyou’reamemberoftheLocalGovernmentpensionschemeandyouwanttomakeadditionalinvestmentstowardsyourfuturepensionbenefits,itmightberightforyou.

Are other options available?YouhaveanumberofoptionstoincreaseyourbenefitswithintheLocalGovernmentScheme.Youshouldcontactyourmainschemeadministratorformoredetails.Youmaywishtospeaktoafinancialadviserbeforedecidingifyouwanttogoaheadwithanyoptionopentoyou.

How flexible is the Local Government AVC?Youcanincrease,reduceorstopyourpaymentsatanytime.Youcanre-startpaymentswheneveryouwishto.IfyouleavethemainLocalGovernmentSchemeandthenreturntoityoucanalsostartmakingpaymentsintoyourAVCagain,ifyouarealsocontributingtotheLocalGovernmentScheme.

Onceyou’vepaidmoneyin,youcannormallyonlyaccessitasretirementbenefits.

How much can I pay into the Local Government AVC?PaymentsaredeductedfromyoursalaryandpassedtoPrudentialtobeinvestedintoyourplan.

IfyourAVCplanoperatesonasalarysacrificesharedcostbasis,itmeansyouagreewithyouremployertoreduceyourpayinreturnforexactlythesameamountofAVCpayments.

IfyoupaySalarySacrificeSharedCostAVC(SSSCAVC)payments,yoursalarysacrificepaymentscannotcauseyourpaytofallbelowtheNationalMinimumWage/NationalLivingWage.Pleaseaskyouremployerforfurtherinformation.

Employees in England & Wales whose AVC plan commenced before 1 April 2014 and all Councillors in England & WalesThemaximumlevelofpaymentsyoucanmaketothisAVCarrangementisrestrictedto50%ofyourpensionablepay.

Employees in England & Wales and members of the London Assembly whose AVC plan started on or after 1 April 2014Youcanpayinupto100%ofyourpensionablepay(subjecttootherdeductionsmadebyyouremployer).


Can I transfer money in? ShouldyouwishtotransferanyfundsintoyourAVCplanyoushouldapproachyourmainschemeadministratorinthefirstinstance.

Transferringpensionsisanimportantdecisionasyoumaybegivinguprightswithyourexistingpensionscheme.Youshouldspeaktoafinancialadviser.

Where are my payments invested?Youchoosewhichfundsyouwouldliketoinvestyourmoneyin,fromthefundrangeavailable.OurUnit-Linkedfundsaredividedintounitsofequalvalueandweusethevalueoftheunitstoworkouthowmuchyourplanisworthatanytime.

Differentfundsofferdifferenttypesofinvestment.Forexample,someonlyinvestinproperty,othersinvestdirectlyinthestockmarket,andothersinvestinawiderangeofassets.Eachfundhasitsownlevelofpotentialrewardandrisk.Usually,fundswithmorepotentialforgrowthcarrymorerisk.

Theperformanceofthefundsisn’tguaranteed.Thevalueofyourinvestmentcangodownaswellasup.Ifitgoesdown,youcouldhavelessmoneyinyourplanthanyoupaidin.

Theremaybeexceptionalcircumstancesthatdelaythebuying,switchingandsellingofunitsorinvestmentsinanyfund.Wewouldnotexpectthesedelaystobelongerthansixmonthsforfundsthatinvestinpropertyorland,andonemonthforfundsthatinvestinotherassettypes.However,wecannotguaranteethatdelayswillneverbelonger.Ifadelaywillapplytoyou,we’llletyouknow.

Forinformationaboutthefundsyoucanchoosefrom,pleasereadthe Fund Guide and“Your With-Profits Plan – a guide to how we manage the Fund”.

Can I change my investments? Youcanmoveyourmoneyinyourplanbetweenfundsatanytime.Wecurrentlydon’tchargeyouforthis.Ifthischangesinthefuture,we’llletyouknow.

IfyoumovemoneyoutofourWith-ProfitsFundwemayreducethevalueofyourfundbyapplyingaMarketValueReduction.MoreinformationonMarketValueReductionscanbefoundinourleaflet“Market Value Reduction – a clear explanation”whichcanbefoundatwww.pru.co.uk/pdf/PRUS6165.pdf.


What if I stop making payments? Reducingorstoppingyourpaymentswillreduceyourfuturepensionbenefits.Wewillcontinuetotakeourchargesevenifyoustoppayments–seethesection“Whatarethecharges?”.

Can I transfer my pension? YoucantransferoutyourAVCtoanotherregisteredpensionschemeorqualifyingrecognisedoverseasschemebeforeage75aslongyouhavestoppedpayingintoyourplanandhaven’tpreviouslyusedanyofyourAVCfundvaluetobuyanannuityorpensionfromyourscheme.Pleasespeaktoyourschemeadministratorformoreinformation.

Can I combine my benefits?England&Walesemployeesonly:ifyouchangelocalgovernmentemployerandchoosetocombineyourmainschemebenefitsyoumayalsoneedtocombineyourAVCplans.ThiswillnormallyresultinanewAVCplanbeingcreated.Thenewplan,includingprevioustransferredinandanyfuturepayments(includingtop-ups),willbesubjectto2014schemeruleswhichcameintoeffecton1April2014.

Tounderstandmoreabouthowthiswouldimpactyouthenpleasespeaktoyourschemeadministratorforfurtherinformation.

IfyouhaveastandardAVCandbeginanewSSSCAVCyouwillnormallyalsobeabletocombineyourAVCplans.Pleaseaskyouremployerforinformationonhowthismayimpactyou.

All Councillors in England & WalesYoumaybeabletocombineyourLocalGovernmentPensionScheme(LGPS)membershipsasaCouncillorprovidedtheyareinthesamelocalauthority.Inthiscase,youwillalsobeabletocombineyourAVCplans.Thiswillnotimpacttheschemerulesapplyingtoyourplan.


What are the charges?Wemakeanannualchargeformanagingyourplanandyourinvestments.Theamountwechargedependsonthefundsyouinvestin.

Inadditiontheremaybesomeadditionalcostswhichimpacttheoverallperformanceofthefund.Thesecostsincludetradinganddealingcostsandpropertyexpenses.

ChargesaretakenfromyourAVCbymakingdeductionsofunitsfromyourfundifyouareinvestedinaUnit-LinkedFund.ChargesaretakeninadifferentwayifyouareinvestedinourWith-ProfitsFund.

Formostfundswecalculatethechargedailyandtakeitmonthlyfromyourplanbycancellingunits.WecalculatethechargefortheWith-ProfitsFunddifferently.

Pleaserememberthatwe’llkeeptakingourcharges,evenifyoustopyourpayments.Ourchargesmayvaryinthefutureandmaybehigherthantheyarenow.

MoreinformationonthechargesmentionedherecanbefoundintheFund Guide.

With-Profits Fund chargesTheWith-ProfitsFund’sannualchargetoyourplandependsontheperformanceofthefund,inparticulartheinvestmentreturnandourexpenses.If,forexample,overtimeinvestmentreturnsarehigher,wewouldexpectchargestobehigher.Ifinvestmentreturnsarelower,wewouldexpectchargestobelower.

Wecurrentlyestimatethischargetobeabout0.94%,basedontheassumptionthatfutureinvestmentreturnsfromtheWith-ProfitsFundwillbe5%peryear.Thischargeisalreadytakenintoaccountwhenwecalculatebonusrates.There’smoreaboutbonusesin:Your With-Profits Plan – a guide to how we manage the Fund.


With-Profits guarantee chargesThereisachargetopayforalltheguaranteestheWith-ProfitsFundsupports.WeguaranteenottoapplyaMarketValueReduction(MVR)incertaincircumstances,e.g.whenpaymentsaremadebecauseofdeathoratyourAVCNormalPensionAge.

Ourcurrentpractice(whichisnotguaranteed)mayincludeadditionalcircumstanceswhenanMVRisnotapplied.Pleaseseethesection“What’saMarketValueReduction?”formoredetails.

Youwon’tseethischargeonyourannualstatementbecausewetakeitbyadjustingregularandfinalbonuses.

Thetotaldeductionforguaranteechargesoverthelifetimeofyourplanisnotcurrentlymorethan2%ofanypaymentmadefromthefund.Chargesmayvaryif,forexample,thelongtermmixortypeofassetsheldwithintheWith-ProfitsFundischanged.

Formoreinformationaboutbonusesandcharges,pleaseread“Your With-Profits Plan – a guide to how we manage the Fund”.

Exit ChargeIfyouwithdrawanyfundswithinthreeyearsofreceiptofyourfirstAVCpensionpayment,anexitchargemayapply.IfyouareinvestedintheWith-Profitsfund,theexitchargewillbetakenafteranyMarketValuereductionhasbeenapplied.

Prudentialhasrevieweditsexitchargeprovisionsfrom19March2017:

• IfyourfirstpaymenttoyourAVCpensionplanswasreceivedonorafter19March2017,therewillbenoexitchargesonfundswithdrawnortransferredfromtheseplans.

• IfyourfirstpaymenttoyourAVCpensionplanswasreceivedbefore19March2017,therewillbeanexitchargeof:

− 1%ifyouwithdrawthefundswithinthreeyearsofthedateyourfirstpaymentwasreceived

− 0%ifyouwithdrawthefundsmorethanthreeyearsafterthedateyourfirstpaymentwasreceived


Thedefinitionofexitchargesrelatestospecificchargestakenonlywhenfundsarewithdrawnortransferredearly.Thisdefinitiondoesnotinclude,forexample,anypotentialMarketValueReductionthatmayapplytoinvestmentsintheWith-ProfitsFundortoanychargetakenasaresultofstoppingpayments.

In what situations will an exit charge not apply?Anexitchargewillnotapplyifmoniesarewithdrawndueto:

• Death.

• Switchesbetweeninvestmentfunds.

• Retirementonthegroundsofillhealth.

• Pensionsharingondivorce.

What’s a Market Value Reduction?IfyoutakemoneyoutoftheWith-ProfitsFund,wemayreducethevalueofyourfundifthevalueoftheunderlyingassetsislessthanthevalueofyourplanincludingallbonuses.Thiswouldalsoapplyiftheschemeadministratorofyourplantransferredpart,orall,ofthescheme.ThisreductionisknownasaMarketValueReduction(MVR).ItisdesignedtoprotectinvestorswhoarenottakingtheirmoneyoutanditsapplicationmeansthatyougetareturnbasedontheearningsoftheWith-ProfitsFundovertheperiodyourpaymentshavebeeninvested.

WeapplytheMVRtoyourplan’svalueincludingregularandfinalbonuses.Pleaseread“Your With-Profits Plan – a guide to how we manage the Fund”formoreinformationonbonuses.

AnMVRwillreducetheamountpayableonfullorpartialwithdrawals,andyoumayevengetbacklessthanyouhaveinvestedinyourplan.

WeguaranteenottoapplyanMVRatyourAVCNormalPensionAgeoronanyclaimsduetodeath.


Our current practice on applying an MVRWemayapplyaMarketValueReductiontofullorpartialwithdrawals,includingthosearisingfromswitchesortransfers,fromallinvestmentsthathavebeenrunningforlessthanfiveyears.

Forinvestmentsthathavebeenrunningforlongerperiods,wewouldconsiderapplyinganMVRwhenawithdrawalresultsinthetotalamountpaidout,includinganyotherpaymentsintheprevious12months,exceeding£25,000.

WewouldonlyapplyanMVRtothewithdrawalamountinexcessof£25,000inthesecircumstances.AsplansapproachtheAVCNormalPensionAge,thesizeofanyMVRthatwouldapplycouldbeexpectedtoreducegradually.

WereservetherighttochangeourcurrentpracticeonMarketValueReductionsatanytime,withoutpriornotice,andthiswouldapplytoexistingplansandanynewplansortop-ups.

Examplesofreasonsforachangewouldincludesignificantchangesintheinvestmentmarketorbecausethenumberofpeoplemovingoutofthefundincreasessubstantially.

How long can I pay into the AVC?

All employees in England & Wales and Councillors in WalesIfyouwish,youcancontinuecontributingtotheAVCuntilyouretire,leaveserviceoruntiltheeveofyour75thbirthdayifearlier.Ifyouchangeemployer,youmayneedtostartanewAVCplan.

Councillors in England and members of the London AssemblyYoucancontinuecontributingtotheAVCuntilthetermofofficeyouwereservingon1April2014ends,oruntilyouretireorreachage75ifearlier.


What might I get back?ThesizeofyourAVCfundfinalbenefitswilldependonmanyfactors,includingthefollowing:

• theamountthathasbeenpaidin,

• howlongyou’vebeenmakingpayments,

• theperformanceofthefund(s),you’vechosen

• theamountofcharges,

• howlongmoneyisinvested,

• theeffectofinflation,

• howyouchoosetotakeyourbenefits,

• taxrules,and

• thelevelofbonuseswhichareaddedtoyourAVCifyouareinvestedintheWith-ProfitsFund.

When can I take my benefits?TheGovernmentcurrentlyallowspeopletostarttakingtheirbenefitsfromtheageof55,evenifyouarestillworking.Youmaybeabletostarttakingyourbenefitsearlyifyou’reinillhealth.

Theminimumagefromwhichyoucanaccessyourpersonaloroccupationalpensionisexpectedtoincreasefrom55to57in2028andremainat10yearsbelowtheStatePensionage.ThemaximumagefromwhichyoumusttakeyourAVCbenefitsiscurrently75.However,youareunabletotakeyourAVCbenefitsbeforeyourmainLGPSschemebenefits.AlternativelyyoucantransferyourAVCplantoanotherRegisteredPensionScheme.Whereyouremployerhasprovidedyouwitharefundofmainschemepayments,yourAVCaccountwillnormallyalsoberefunded.Thisrefundissubjecttoastatutorytaxdeduction,currently20%onanyrefundupto£20,000and50%onanyexcess.PrudentialwillrefundthewholeAVCaccounttothemainscheme,whowilldealwithanypotentialtaxdeductions.

IfmoneyistakenoutoftheWith-ProfitsFundatanytimeotherthanyourAVCNormalPensionAgeoronyourdeath,theamountpayablemaybereducedtoreflectthevalueoftheunderlyingassetsatthattime.ThisisknownasaMarketValueReduction(MVR).


What choices will I have when I take my benefits?Therearefourmainoptionswhichmaybeusedincombination:

• UncrystallisedFundsPensionLumpSum–takeasingleorseriesoflumpsumsfromyourpensionsavings.

• Flexi-accessdrawdown–anewformofdrawdownwhichwillallowyoutotakeanunlimitedamountofincomeorlumpsumsfromapensionfund.Thiswillreplaceflexibleandcappeddrawdown,althoughexistingcappeddrawdownplanswillcontinue.

• Apensionannuity–aninvestmentthatguaranteestopayasecureincomefortherestofyourlife,regardlessofhowlongyoulive.

• Pensiondirectlyfromapensionscheme–occupationalpensionsschemesarenotchanging.Youwillstillbeabletodrawapensionfromanyoccupationalpensionschemeyouareamemberof.

Pleasecontactusasyouapproachretirementandwewillletyouknowwhichoftheseoptionswemaybeabletoofferyou.Youmayhavetotransfertoanotherpensionarrangementtotakeadvantageofthemall.

Whateveryoudecidetodowithyourpensionsavings–youdon’thavetostaywithus.Youshouldshoparoundanddependingonthechoicesyoumake,youmayfindsomethingmoreappropriateelsewhere,withalternativefeatures,investmentoptionsorcharges.

YourLocalAuthorityAVCallowsyoutotakeallorofyourAVCplanasataxfreecashlumpsumaslongasyoutakeitatthesametimeasyourmainschemebenefitsanddoesnotexceed25%ofthecombinedvalueofyourplanandyourmainschemebenefits.ThismustalsofallwithinthemaximumpermittedbyHMRCrules.

Where can I get guidance about what to do with my pension?Twofreeandimpartialservices,setupbytheGovernment,areavailabletogiveyoumoreinformationaboutpensions.GeneralguidanceonallaspectsofpensionsisavailablefromtheMoneyAdviceServicewww.moneyadviceservice.org.ukTelephone:0800 138 7777.

Forpeopleover50,PensionWiseisalsoavailable.ThisGovernmentserviceoffersguidancetopeoplewithmoneypurchasepensionsonalltheoptionsavailablefortheirpensionsavings.Youcanhaveafreeconsultationonline,overthephoneandfacetoface.Findoutmoreatwww.pensionwise.gov.uk. Telephone: 0800 138 3944.


What about tax?

Standard paymentsYourAVCpaymentsaredeductedfromyoursalarybeforetaxandpassedtoPrudentialforinvestment.Thismeansifyounormallypaytaxyou’llqualifyforimmediatetaxreliefonyourpayments.

Salary Sacrifice Shared Cost AVCs IfyourAVCplanoperatesonasalarysacrificesharedcostbasis,itmeansyouagreewithyouremployertoreduceyourpayinreturnforexactlythesameamountofAVCpayments.AsaresultitlowersyourearningswhichmeansyoupaylesstaxandNationalInsurance,subjecttoyourpersonalcircumstances.ThepayyousacrificeispaidintoyourAVCpotbyyouremployer.

Also,youarerequiredtomakeapersonalpaymentof£1grosseachtimeyousaveintoyourAVCpot.Thisworksoutto£0.80netforabasicratetaxpayer,or£0.60netfor40%taxpayer.Thisisalsotakenfromyourpayandwillbepaidintoyourpot.Youwillnormallyalsomaketax,butnotNationalInsurancesavings,onthispersonalpayment.Pleasenotethattaxrulesandlegislationmaychangeinthefuture.

TheremaybesomemembersforwhomSharedCostSalarySacrificeAVCsarenotsuitableorpossible.Youremployerwillbeabletoprovideyouwithfurtherdetailsofhowsalarysacrificeworksintheirscheme.

Formoreinformationonsharedcostsalarysacrifice,pleasespeaktoyourschemeadministrator.

We’vebasedthisinformationonourunderstandingofcurrentlawandHMRCRevenueandCustomspractice.Yourindividualcircumstancesandfuturechangesinlawandtaxpracticecouldaffecttheamountyoupay.

Ifyouneedfurtheradviceontaxyoumaywishtospeaktoafinancialadviser.

Annual AllowanceTheAnnualAllowanceisalimittothetotalamountofpaymentsthatcanbepaidtodefinedcontributionpensionschemesandthetotalamountofbenefitsthatyoucanbuildupindefinedbenefitpensionschemeseachyear,fortaxreliefpurposes.

Taxisacomplicatedsubjectandyoumaywishtoseekadviceifyoufeelthiswillaffectyou.Formoreinformationpleasevisitwww.pru.co.uk/taxorvisittheHMRCwebsiteatwww.hmrc.gov.uk.


Money Purchase Annual AllowanceTheMoneyPurchaseAnnualAllowance(MPAA)willapplytoyouifyouhaveflexiblyaccessedpensionbenefitson,orafter,6April2015.YourpensionschemeadministratororproviderpayingthesebenefitswillhaveinformedyouifyouaresubjecttotheMPAAatthetimetheypaidtheflexiblebenefits.InanyyearwhereyouexceedtheMPAAyouwillincurataxchargeandyoushouldseekfinancialadviceifyoufeelthismayaffectyou.

Examplesofdrawingbenefitsflexiblyincludetakingincomefromflexi-accessdrawdownortakingacashlumpsumdirectfromyourpensionplanasanUncrystallisedFundsPensionLumpSum.

InanyyearwhenyouexceedtheMPAA,yourannualallowanceforothertypesoftax-relievedpensionsaving,suchasdefinedbenefits,isreducedbytheMPAA.

Formoreinformationvisitwww.pru.co.uk/ taxortheHMRCwebsiteatwww.hmrc.gov.uk.

Lifetime AllowanceThereisnolimitonhowbigyourpensionfundcangrowto,howeveryouwillhavealifetimeallowanceinrelationtothemaximumamountoftax-relievedbenefitsyoucanbuildupoveryourlifetime.

Ifyouthinkyouareaffectedbythislimityoucangetmoreinformationvisitwww.pru.co.uk ortheHMRCwebsiteatwww.hmrc.gov.uk

How will I know how my plan is doing?We’llsendyouanannualstatementtoshowhowyourplanisdoing.Oryoucancallususingthecontactdetailsatthebackofthisdocumentforavaluation.Youcancheckyourfundonlineatwww.pru.co.uk/localgov.

What happens to the Prudential Local Government AVC if I die?IfyoudieandyoustillhavemoneyinyourAVC,we’llnormallypaythevalueofitasalumpsumtowhoeverthemanagersofyourschemeadviseshouldreceivethis.Thiswillnormallybepaidtoyourspouse,civilpartner,co-habitingpartner,otherdependantorlegalrepresentative.IfyouhaveelectedtopayAVCsforthepurchaseoflifecover,themanagersofyourschemewilltelluswhoshouldreceivethedeathinservicelumpsumand/orbeneficiarypension.


Can I use my AVC to provide optional Life Cover?YoucanuseAVCstofundoptionallifecoverforyourself,yourspouseand/ordependantsoradependantpensionifrequired.

Thecostofthiscoverincreaseseverythreeyearsforthelevelofcoverselected.TheenddateofyourlifecoverwillbedependentontheschemeruleswhichappliedwhenyouelectedtojoinyourAVC.

Employees in England & Wales whose plan commenced before 1 April 2014 and all Councillors in WalesYourlifecoverwillnormallyendatage65.Coverwillendsoonerifyoustopmakingpayments,leaveservice/officeorwhenyouretire.

Employees in England & Wales whose plan commenced on or after 1 April 2014Yourlifecoverwillnormallyendwhenyoureachyournormalpensionageunderthe2014Scheme.ThiswillbethedateyoureachyourStatePensionAge.Coverwillendsoonerifyoustopmakingpayments,leaveservice/officeorwhenyouretire.

Councillors in England and members of the London AssemblyYourlifecoverwillnormallyendwhenthetermofofficeyouwereservingon1April2014ends.Coverwillendsoonerifyoustopmakingpayments,retireorreachyournormalretirementage.ForcouncillorsinEngland,yournormalretirementageis65.FormembersoftheLondonAssembly,yournormalretirementageisyourStatePensionAge.

What if the Local Government AVC is not right for me?Youcan’tcancelyourplan.However,youcanreduceorstopyourpaymentsatanytime.Pleaseseethesection“WhatifIstopmakingpayments?”.


What happens if I leave service?IfyouleavetheLGPS,your/youremployer’spaymentswillstopandyourAVCplanwillremaininvested.Anychargeswillcontinuetobetakenuntilyoutakeyourbenefits.Ifyouaremakingpaymentsforadditionallifecover,yourcoverwillstopwhenyouleave.Youcanrestartpaymentswhenyourejointhemainscheme.However,thiswillnormallymeanthatyouneedtostartanewAVCplan.

Alternatively,youcantransferoutyourAVCtoanotherregisteredpensionschemeorqualifyingrecognisedoverseasschemebeforeage75aslongyouhavestoppedpayingintoyourplanandhaven’tpreviouslyusedanyofyourAVCfundvaluetobuyanannuityorpensionfromyourscheme.Whereyouremployerhasprovidedyouwitharefundofmainschemepayments,yourAVCaccountwillnormallyalsoberefunded.Thisrefundissubjecttoastatutorytaxdeduction,currently20%onanyrefundupto£20,000and50%onanyexcess.Pleasespeaktoyourschemeadministratorformoreinformation.

Note:IfyouareaCouncillorinEnglandoramemberoftheLondonAssembly,youwillbeunabletocontinuemakingpayments,restartorbeginanewAVCplanafterthetermofofficeyouwereservingon1April2014hasended.

WemayapplyanMVRtoanymoniestakenoutoftheWith-ProfitsFund.Pleaseseethesection“What’saMarketValueReduction?”.


Other information

Client category Weclassifyyouasa‘retailclient’underFinancialConductAuthority(FCA)rules.Thismeansyou’llreceivethehighestlevelofprotectionforcomplaintsandcompensationandreceiveinformationinastraightforwardway.

Financial strengthPrudentialmeetsEUstandardsformeetingitsfinancialobligations.Youcanreadoursolvencyandfinancialconditionsreportsatwww.pru.co.uk/about_us,orifyoucontactuswecanpostsomeinformationtoyou.

CompensationPrudentialconductrobuston-goingmonitoringofallinternalfundsandtheexternalfundmanagersweinvestwith.Thisaimstoensuretheintegrityofthefunds,thesecurityoftheassetsmanagedonourbehalfandthatanagreedinvestmentapproachisfollowed.Thisallowsustoanticipateanyeventsthatmaycausesolvencyissuestoensuretheycanbeaddressedappropriately.

• ifyouinvestinfundsmanagedbyPrudentialAssuranceCompanyLimited(PACL),i.e.With-ProfitsorDeposit,youarefullyprotectedundertheFSCSupto100%ofyourinvestmentsubjecttotherebeinganeligibleclaim.

• ifyouinvestinfundsmanagedbyPrudentialPensionsLimited(PPL),i.e.anyPrudentialfundsotherthanWith-ProfitsorDeposit,youwillnotbecoveredundertheFSCS.AlthoughFSCS

protectiondoesnotapplytoPPLfundsthereisacustodianinplacetoofferprotectiontoinvestors.Thepurposeofthecustodianistohelpring-fenceinvestedmoneyfromthatofthefundmanagerandthushelpprotecttheinvestedmoneyintheeventthemanagerisinsolvent.

• ifyouinvestinexternalfundsofferedbyotherfundmanagers,thesewillnotbecoveredundertheFSCS,althoughexternalfundmanagersmayappointadepositoryandacustodian,thepurposesofwhicharetohelpring-fenceinvestedmoneyfromthatofthefundmanager.Althoughweaimtorecoveranymoneyinvested,PACLwouldnotbeliableforadefaultoftheexternalfundmanager.

YoucanfindoutmoreinformationontheFSCSandexamplesoflimitsinthescopeofFSCScoverforyourplanatwww.pru.co.uk/about_us/fscs,oryoucancallus.

InformationisalsoavailablefromtheFinancialServicesCompensationScheme.

Visittheirwebsite:www.fscs.org.uk.

Orwriteto:

The Financial Services Compensation SchemePO Box 300MitcheldeanGL17 1DY

OrcalltheFSCS.Telephone:0800 678 1100


Prudential’s liabilityOurliabilityunderanyfundthatwemakeavailableunderthePrudentialLocalGovernmentAVCSchemecannotexceedthevalueoftheassetsunderpinningthatfund,whethertheseassetsareactualassets,aninterestinanotherfund(whethermanagedbyacompanywithinthePrudentialgrouporbyanexternalcompany)oraninterestinareinsurancepolicyeffectedbyustoreinsureourliabilityunderafund.

Inparticular,fortheUnit-LinkedfundswhichareinvestedsolelyinfundsoperatedbyanothercompanywithinthePrudentialgrouporexternally-linkedfunds,ourliabilityislimitedtotheamountwecanclaimfromtherelevantcompany.So,forexample,iftheexternalcompanyortheothercompanywithinthePrudentialgroup,weretobecomeinsolvent,wecouldonlypaytheamount,ifany,whichwecouldcollectundertheinsolvencyinrespectoftheunitsallocatedtotheplan.

Inaddition,wearenotliableforanylossescausedbytheactsandomissionsofanexternalcompanyinrespectofitsownfundand/ortheexternally-linkedfund.

Conflict of InterestWewanttomakesurethatweupholdourreputationforconductingbusinesswithintegrity.Ifwebecomeawarethatourinterestsmayconflictwithyourswewilltakeallreasonablestepstomanageitinanappropriatemanner.

Wehavedrawnupapolicytodealwithanyconflictsofinterest.IfyouwouldliketoknowthefulldetailsofourConflictofInterestPolicy,pleasecontactourCustomerServiceTeamonthecontactdetailsonthelastpage.

Law ThelawofEnglandandWalesappliestothiscontract.

Our regulatorsWeareauthorisedbythePrudentialRegulationAuthorityandregulatedbytheFinancialConductAuthorityandthePrudentialRegulationAuthority.PrudentialAssuranceCompanyLimitedisenteredontheFinancialConductAuthority(FCA)Register,FCAReferenceNumber139793.TheFCARegisterisapublicrecordofalltheorganisationsthattheFCAregulates.

YoucancontacttheFCAat:

The Financial Conduct Authority 25 The North Colonnade London E14 5HS


Telephone: 0800 111 6768 or 0300 500 8082

Email: [email protected]

PrudentialRegulationAuthoritydetails:

The Prudential Regulation Authority Bank of England Threadneedle St London EC2R 8AH

Telephone: 020 3461 4444

Email: [email protected]

Communicating with youOurplandocumentsandtermsandconditionsareinEnglishandallourothercommunicationswithyouwillbeinEnglish.

How to make a complaintIfyouhaveacomplaint,pleasegetintouchwithusandwewilldoeverythingwecantoresolveit.Youcanalsoaskusfordetailsofourcomplaintshandlingprocess.Ourcontactdetailsareinthe‘Howtocontactus’sectionatthebackofthisdocument.

Ifyou’renotsatisfiedwithourresponse,youcantakeyourcomplainttotheFinancialOmbudsmanServicewhohelpsettleindividualdisputesbetweenconsumersandbusinessesprovidingfinancialservices:

Financial Ombudsman ServiceExchange TowerLondonE14 9SR

Telephone: 0800 023 4567 or 0300 123 9123

Orvisitthewebsite:www.financial-ombudsman.org.uk

Helpisalsoavailablefromthefollowingbodies:

The Pensions Ombudsman11 Belgrave RoadLondonSW1V 1RB

Telephone: 020 7630 2200

ThePensionsOmbudsmanisanindependentorganisation,setuptoinvestigatecomplaintsaboutpensionadministration.

The Pensions Advisory Service (TPAS)11 Belgrave RoadLondonSW1V 1RB

Telephone: 0300 123 1047

ThePensionsAdvisoryServiceisanindependent,Governmentfundedbodythatgivesfreeadvicetomembersofthepublicaboutpensions.

Theseservicesarefreeandusingitthemwon’taffectyourlegalrights.


Ifyouwanttocontactusbeforeyoubuythisplan,youcandosointhefollowingways:

Writeto: Prudential Lancing BN15 8GB UK

0345 640 3000MondaytoFriday8amto6pm.Wemayrecordormonitorcallstoimproveourservice.

Ifyouareadeafcustomer,whoisalsoaBritishSignLanguage(BSL)user,youcancontactususingaVideoRelayservice.Theservice,providedbySignVideo,connectscustomerstofullyqualified,registeredNRCPDinterpreterswhowillrelayyourconversationwithamemberofourcustomerserviceteam.

www.pru.co.uk/contact-us/signvideo

ThereisnocostforusingthisservicetocallPrudentialandwe’reavailabletohelpyouMondaytoFriday,8amto6pm.

You’llalsofindmoreinformationat:www.pru.co.uk/localgov

Keep in touch

It’simportantthatwekeepintouchso,ifyouchangeyouraddressoranyofyourcontactdetails,pleaseletusknow.

How to contact us

The Prudential Assurance Company Limited (PACL) is registered in England and Wales. This name is also usedby other companies within the Prudential Group. Registered Office at Laurence Pountney Hill, London, EC4R0HH.Registerednumber15454.AuthorisedbythePrudentialRegulationAuthorityandregulatedbytheFinancialConductAuthorityandthePrudentialRegulationAuthority.

www.pru.co.uk

LAV

K08

461

2/20

17

Date post:	08-Feb-2018
Category:	Documents
Upload:	buithuy
View:	220 times
Download:	4 times

Key Features of the Local Government Additional Voluntary ... · PDF file2 Key Features of the...

Documents