31/1/2008 - Changes to AVC arrangements

If you have Additional Voluntary Contributions (AVCs) in SIPS you will have received a scheme announcement in January regarding the changes to this arrangement and to the investment choices you have for the AVCs you pay.

What´s changing?

SIPS members´ AVCs are currently paid to the chosen AVC provider, Clerical Medical. However, from 1 April 2008, the current AVC provider will be replaced by Prudential.

The Trustee chose Prudential after a careful selection process. The Trustee believes it offers a suitable range of funds to invest in, good administrative support and value for money. Furthermore, it is committed to the AVC market.

What does it mean for me?

If you currently pay AVCs, your contributions from 1 April will automatically be paid to Prudential and invested in its default Lifestyle option, unless you request otherwise.

If you have paid AVCs in the past, you can leave your funds with Clerical Medical or transfer your money to Prudential. 

Note: There is no charge for transferring your existing AVC holdings from Clerical Medical to Prudential unless you are invested in the with-profits fund. However, you should seek independent financial advice before you make any decisions regarding transferring funds.

What investment options are open to me?

The Trustee has taken professional advice as to the range of investment funds available to you and, after careful consideration, has decided to offer the following investment options:
 
The Lifestyle option (default option) — Contributions will be invested in equities up to ten years prior to retirement. As you near retirement your AVC account will gradually switch from equities to cash in order to preserve the capital value of your fund.

Fund options — A range of six funds for you to choose from which include cash, bonds, equities and property funds.

Note: Everyone currently contributing to SIPS has the option to pay more towards their retirement savings by paying AVCs.  If you would like to start paying AVCs, please contact the SIPS team by following the “Contact Us” link at the top of the page.