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Topic: Teacher AVCs - is it a SIPP  (Read 2001 times)

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Teacher AVCs - is it a SIPP
« on: August 31, 2023, 07:26:32 PM »
Slightly random question, but I am thinking of contributing to teacher AVC (additional voluntary contributions) to try and avoid going into the 40% tax bracket. AVCs are taken from salary pre-tax and paid into a fund held by the Prudential. So there are potential SIPP = trust issues as well as PFIC since the fund is likely to be made up of various pooled investement funds. My employer contributes well over half of the money that goes into my normal teacher pension, but would not contribute directly to the AVC which is effectively a pot of money alongside my main pension.  I know there's no simple answer to this but wondered if anyone had experience of AVCs or thoughts?


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Re: Teacher AVCs - is it a SIPP
« Reply #1 on: August 31, 2023, 08:20:55 PM »
Although the Teachers' Pension Plan and the  USS are different plans, the commentary from the USS sets out the position for both the USS and most other UK registered pension plans. Please scroll down to the section headed: "US federal income tax - US citizen members" https://www.uss.co.uk/help-and-support/frequently-asked-questions


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Re: Teacher AVCs - is it a SIPP
« Reply #2 on: August 31, 2023, 09:23:19 PM »
Thank you - I am a deferred member of USS too. Some of the PFIC discussion there isn’t relevant for the main  teacher pension scheme which is backed by gov’t and not invested eg in funds, I believe. The AVC element of TPS is totally separate from the defined benefit bit and you can’t transfer funds between, but you can with USS because it’s a hybrid plan. That’s why I’m wondering if the AVC is closer to a SIPP. Anyway, I could probably just do it and say I’ve done my best to interpret their guidance - if they notice!


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