# SCSB reduction for Pension Lump Sum: Impact of AVCs?



## cbyr1983 (28 Mar 2018)

The tax free termination benefit can be calculated by reference to the SCSB rules.

Those rules dictate that if a waiver to a tax free lump sum from the employers' occupational pension scheme is not signed, the present value of that future pension lump sum comes off the SCSB amount, thereby potentially rendering some of the termination payment taxable.

Question is:

1. Do AVCs made by an employee get factored into the calcuation of the future tax free pension lump sum by the actuary?

2. If the answer to (1) is yes, if the person makes AVCs prior to the termination date, do they cause the SCSB calculation to reduce?


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## JoeRoberts (29 Mar 2018)

The calculation of the PVLS is quite generous and nice.

It will be based on your yrs of service and salary and does not consider the value of the fund. Even though your lump sum could be based on 25% of the fund depending on scheme type. It doesn't matter for the PVLS.
So avcs will not reduce it in any way.


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## Bladerunner (2 Mar 2020)

My understanding of the SCSB rules for redundancy,  is that the formula is used to determine how much is tax free and then the pension lump sum is deduced if you want the pension lump sum to be tax free when you retire. The question I am unsure of is, If one has an AVC taken out, to cover non pensionable earnings, i.e overtime and bonus, can this be taken tax free when you retire. I could not find anything on revenue site how AVC is dealt with in this case


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