Paying Lump Sum AVCs into Employers Pension Scheme

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A friend of mine wants to make a lump sum payment into her Employers pension scheme (about £40k).

Is it possible for her to pay the Scheme directly, and for them to recover the tax?
If not then can she recover the tax via submitting a self assessment form?
If the answer is still no am i right in thinking the only option is for her to make the payment via her Employers payroll?

I believe her pension scheme is a "Net Pay Arrangement" and not a "Relief at Source"

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anonymous said:

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Thanks.

When you say you made a direct payment does that mean you sent them a cheque/bank transfer directly and not via your employer?

[DjSki]

Work pension schemes aren't the best, maybe get her to set up a SIPP instead and spread her risk into some other funds?

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Unfortunately her Company have their own scheme and the administrators have indicated there is no facility to make a "direct" payment, they will only take payments through payroll. As she has missed the cutoff for this year I'm guessing that she will have to pay next year.

Thanks for the comments

[DjSki]

Exactly, open a SIPP quick and stick the money in.

[xeny]

DjSki said:

Work pension schemes aren't the best, maybe get her to set up a SIPP instead and spread her risk into some other funds?

Depends on the scheme - mine offers salary sacrifice contributions (so you save NI) and subsidises all the management costs, the only arguable down side is that the funds are restricted to a variety of trackers, but given that's what is generally considered sensible to put in a long term investment anyway, I don't find that a large enough hardship to want me to pay to run a SIPP, or to pay NI on the money going in to it.

[xeny]

anonymous said:

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I did read the thread. I was pointing out a generic "work schemes aren't the best" response isn't true of all work schemes. Did you read what I was replying to?

Edited by xeny on Thursday 25th March 06:14

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anonymous said:

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Good point, I didn't think of that. Her occupational scheme is DB but (if I understand it correctly) AVCs are a separate thing and won't increase her DB pension so she might as well invest it separately.....

[cloud_dog]

Countdown said:

Good point, I didn't think of that. Her occupational scheme is DB but (if I understand it correctly) AVCs are a separate thing and won't increase her DB pension so she might as well invest it separately.....

AVC can supplement the PCLS amount thereby (indirectly) allowing a larger DB pension to be paid than the reduced pension due to taking some/all of the PCLS, i.e. take the full PCLS with 50% being made up of AVC monies, allowing a smaller reduction in the DB pension amount.

[martinbiz]

cloud_dog said:

AVC can supplement the PCLS amount thereby (indirectly) allowing a larger DB pension to be paid than the reduced pension due to taking some/all of the PCLS, i.e. take the full PCLS with 50% being made up of AVC monies, allowing a smaller reduction in the DB pension amount.

Not in all cases. A few years ago I wanted to make an addtional contribution to my DB pension and after deliberating for a couple of weeks the scheme actuaries said no