Derbyshire County Council Pension Fund has consolidated its additional voluntary contribution (AVC) pension scheme arrangements as part of efforts to boost take-up of AVCs.
The council, which previously had three AVC plans, has retained its arrangement with Prudential.
AVCs offer pension scheme members a cost-effective, tax-efficient way to increase their pension savings. Only around 2% of Derbyshire County Council’s pension scheme members (approximately 700 people) currently take advantage of the arrangement.
Employees who currently have their AVC arrangements with one of the other two providers will be given the option to transfer to Prudential.
Peter Makin, chair of the Derbyshire County Council Pension Fund Committee, said: “Our decision to have one AVC provider was prompted by our desire to open up awareness and access to AVCs to our pension fund members.
“Employees first need to understand the benefits, and this comes down to communication. Prudential’s ability to communicate effectively with our pension fund members along with its AVC proposition and wide range of investment funds were factors in our decision.”
Richard Harrison, head of client management at Prudential, added: “Most local government employees are unaware of how beneficial AVC arrangements are in boosting retirement income.
“The low take-up among Derbyshire County Council pension members means that many are missing out on larger pension pots when they reach retirement.”
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