The Secretary of State for Communities and Local Government is required to issue actuarial guidance on the amount of service credit a member may be granted in respect of the accumulated value of additional voluntary contributions (‘AVCs’) in the LGPS. As part of this consultation the Department for Communities and Local Government (DCLG) have asked GAD to recommend actuarial guidance in respect of the regulations detailed below. The document below forms GAD’s recommendation for the actuarial guidance required by these regulations.

The guidance only covers the actuarial principles around the calculation of service credits in respect of AVCs for members who made an election to pay AVCs under regulation 60(1) of the 1997 Regulations prior to 13 November 2001. For further details please contact

Additional Voluntary Contributions to transfer credit guidance

Government Actuarial Department Covering Letter


Shared Cost Additional Voluntary Contributions and Salary Sacrifice

A number of Prudential employers have expressed an interest in setting up a Shared Cost Additional Voluntary Contributions (AVCs) arrangement for their staff so that they can offer AVCs on a salary sacrifice basis.

Whilst Prudential is supportive of employers’ wishes to offer AVC contributions through salary sacrifice schemes, implementing this as a “Shared Cost” arrangement under The Local Government Pension Scheme Regulations 2013, means that any such arrangement is not solely a matter to be agreed under the individual’s Contract of Employment. It must also comply with Scheme Regulations and applicable pensions legislation. Prudential does not currently facilitate such salary sacrifice arrangements in respect of AVC contributions but they are reviewing this and will update Employers with further information in this regard as soon as they have determined whether and how they can support such arrangements.

The Scheme Regulations and pensions law requirements affect both the employer and the AVC provider. Before any such new salary sacrifice arrangements can be implemented in respect of AVC contributions, Prudential must agree to the new arrangements as the AVC provider. To the extent that Prudential discharges regulatory duties on behalf of LGPS pension funds, it is also essential that they are appropriately notified of and agree to any salary sacrifice arrangements so that they do not inadvertently cause them to be non-compliant with their legal duties.

Prudential regret to announce that they cannot be held responsible for any breaches, liabilities, errors, tax consequences or complaints if salary sacrifice arrangements have been implemented without their agreement.

If, as an employer you have already implemented a shared salary sacrifice shared cost AVC arrangement which Prudential may be unaware of, please email will ensure that your arrangement is brought in scope of the changes currently being considered.

Thank you for your patience and co-operation.