# What happens to AVCs in the event of my demise?



## onekeano (3 Jul 2007)

I pay a lot into my employers AVC fund each month. I was assuming that in the event of my demise my AVC fund would go to my family in addtion to my normal death benefit. Can anyone please clarify if this is the norm?

Thanks
Roy


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## Guest126 (3 Jul 2007)

How is the main part of the pension plan that you contribute to treated in the event of your demise?

Usually, the same treatment would apply to any AVCs.


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## Mizen Head (3 Jul 2007)

Capital, now you got me worried. Surely, the main pension pays death and widows benefit, so whats happens to my AVC (assuming main scheme is paying maximum allowed)


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## Guest126 (3 Jul 2007)

Mizen - do not confuse death benefits from the main plan with pension benefits from main plan.

What would happen to the pension benefits on death?

They would usually be used to provide an additional widow pension, so the same treatment would apply to any AVC.


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## Mizen Head (3 Jul 2007)

Thanks, Capital. I think I understand.


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## Guest126 (3 Jul 2007)

No prob.


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## Conan (3 Jul 2007)

To be precise, the maximum lump sum that can be paid out on death in service is 4 x Salary plus a refund of any member contributions (including AVCs). 
So in effect the value of the AVC fund would be paid as a lump sum (it is not required to buy a widows pension) in addition to the lump sum life cover in the main scheme.


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## Guest126 (3 Jul 2007)

Conan - don't forget that the money to come out of the pension scheme may necessitate the purchase of additional pension for any spouse.

4 time salary plus pension contributions will almost definitely not cover off all the pension money coming back on death (given that there would also be employer contributions).

I felt that the OP just wanted to make sure that the AVC will remain within his/her estate, and it will.


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## onekeano (3 Jul 2007)

Thanks for the clarification guys - just a niggling doubt crept in during a recent conversation.

Roy

PS. Just got this clarification from the pension people "In the event of death the value of the Employee Contributions, AVC's and any investment growth on these, are encashed and passed to the beneficiaries of the member."


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## TheFatMan (6 Nov 2008)

Ok the above clears up what happens to AVCs on death.
But what happens to the Employer contribution? Must it be used to purchase an annuity or can the trustees decide to give it all as part of the lump sum?


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## LDFerguson (7 Nov 2008)

Conan's post (Number 7 above) answers this.


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