Freestanding AVCs

Free Standing Additional Voluntary Contributions (FSAVCS) 

A Free Standing Additional Voluntary Contributions Scheme (FSAVCS) is a retirement benefits scheme established solely to accept contributions from employees to top up benefits provided by their employers' pension schemes.

The right to pay additional voluntary contributions (AVCs) to an FSAVCS is available only to employees while they are accruing benefits under an approved retirement benefits scheme (or such a scheme being considered for approval) or a relevant statutory scheme of their present employer or to which that employer contributes. This requirement will be regarded as met even if the individual is covered only for death in service benefits under his employer's approved retirement benefits or relevant statutory scheme(s). If the member withdraws from all such schemes of the employer while still in service, contributions to the FSAVCS must cease. Contributions may continue, or even commence, after the normal retirement date provided that benefits continue to accrue under the main scheme. No contributions may be paid after the relevant date.

An employee must not contribute to more than one FSAVCS in respect of the same employment in any one tax year. This requirement does not affect the individual's right to pay, at the same time, AVCs to an approved retirement benefits scheme or a relevant statutory scheme of the employer, provided the limit of the member's earnings from the employment for that year is not exceeded.

Controlling directors must be excluded from membership. If a member becomes a controlling director contributions must cease at once. Conversely, if he or she ceases to be a controlling director, contributions may be started or resumed.

For more information on Free standing Voluntary contribution please see http://www.hmrc.gov.uk/pensionschemes/ir12_supp.pdf

Setting up a FSAVCS on Bright Pay

To access this utility click “Employer”

1)     Click Add Pension Scheme
         Enter the Name of the policy, (the company that is providing the FSAVCS, enter the reference number
         provide by the pension company. 

2)     Choose Type of Pension
         From the dropdown, select FSAVCS as your pension type.

3)    Reduction
        Where applicable, tick the box to reduce the amount contributed to the FSAVCS by the basic tax rate.
        The pension company will increase the amount contributed to the pension scheme by the basic tax rate.

4)     Enter Contact information
        Click the Contact and Payment tab. Enter the Contact information of the FSAVCS provider.

5)     Enter Payment information
        Chose from the dropdown how you will be paying over the pensions to the FSAVCS provider.
        If you are paying by credit transfer enter your Pension Companies account details in the box provided.
        You will be able to create a BACS files to send to your bank to automatically transfer the pension fund.

Click Save

Applying the Pension Scheme to your Employees

To apply a pension to your employee Go to Payroll > Double click Employee

ENTER A PENSION DEDUCTION BY AMOUNT:

1)    Under Deductions click Add icon

2)    Select Pensions as the deduction.

3)    From the Drop down, select the FSAVCS scheme type which has been previously set up.

4)    Enter amount for employee's contribution in the box provided

5)    Enter amount for employer's contribution in the box provided

6)    The total amount entered will be deducted from the employees weekly, fortnightly or monthly Net pay as appropriate.

ENTER A PERCENTAGE PENSION:

1)    Under Deductions click Add icon

2)    Select Pensions as the deduction.

3)    From the Drop down, select the FSAVCS scheme type which has been previously set up.

4)    Enter amount for employee's contribution in the box provided

5)    Enter amount for employer's contribution in the box provided

6)    The total amount entered will be deducted from the employees weekly, fortnightly or monthly gross pay as appropriate.

7)    To apply a percentage basis click the drop down (beside the amount) and select %

8)    Enter the % amount in the Box provided.

Pay FSAVCS to the Pension Provider

To access this utility (once payroll has been finalised) go to Payroll > Pay Pensions

1)    This report will show the breakdown of the Pension payments to be paid to your pension company.

2)    To print this report click Print

3)    To export the Pensions report click Export (the report can be copied to excel, CSV, XPS or copied to clipboard.)

4)    You can select to print or view the Pensions report for all, some on one employee, select which employees you want to run the report for on the right hand side.

Create a BACS File/ Bank Payment File

A Bank payment file can be created to send to your bank by clicking the Create BACS File button.