Free standing additional voluntary contributions

 

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Free standing additional voluntary contributions

An employee's pension scheme which is additional to but independent from his occupational pension scheme. The maximum amount which may currently be contributed to an employee's pension fund is 15% of salary (which includes benefits in kind) including his company scheme. For example if an employee is contributing 10% of his salary to a company scheme, a further 5% can be paid by that employee in each tax year into FSAVCs or AVCs. However, the employer and employee contributions when combined must not produce benefits in excess of Inland Revenue maximums.



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Money purchase scheme (defined contributions scheme)

Money purchase scheme (defined contributions scheme)

A pension scheme in which the benefits will be dependent on contributions to, and growth of, the fund and the fund manager's costs.


Contributions Agency

Contributions Agency

An executive agency within the Inland Revenue. The Contributions Agency deals with all aspects of NI (National Insurance) contributions. The agency has locations throughout the country.


Federal Insurance Contributions Act

Federal Insurance Contributions Act

In the US, the federal law which directs employers to withhold a proportion of employees' salaries for payment to the government in order to provide future pension and other social security benefits.


Additional voluntary contributions

Additional voluntary contributions

Additional payments to a tax deferred savings account or an occupational pension scheme by an employee to boost a pension at retirement.


National Insurance (NI) Contributions

National Insurance (NI) Contributions

There are currently four categories of contributions: Class 1, Class 2, Class 3 and Class 4.Class 1: Employees earning above the lower earnings limit pay contributions at a rate dependent on their income and whether they are contracted in or out of S2P (State Second Pension). The contributions are made up to the upper earnings limit, that is, no NI contributions are payable on earnings above this limit. In addition to employees' contributions, employers must pay Class 1 contributions on all the employees' earnings.Class 2: Self employed people pay flat rate Class 2 contributions provided profits are above a certain level.Class 3: These are voluntary contributions which can make up for unpaid contributions over the previous six years.Class 4: Self employed people also pay a percentage of profits between given limits.




 
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