Additional Voluntary Contributions (AVC) are extra funds contributors can opt to add to his/her mandatory pension contributions, or simply set aside as retirement savings. These funds would be deducted from your monthly emolument by the contributors' employer and remitted into his/her Retirement Savings Account (RSA), along with his/her regular pension contributions.
AVC differs from other regular savings a contributor may have, as it is deducted from the contributors salary before tax. This is a significant advantage of the AVC, as it means the contributions are tax-free and lower the contributors' overall tax liability.
Additional Voluntary Contributions are pooled into Trustfund Pensions RSA Fund and, therefore, are invested and managed in the same rigorous manner as the contributor's regular pension contributions.
An additional advantage, and a major difference from regular pension contributions, is that the contributor is at liberty to decide the amount he/she wishes to contribute, in addition to the frequency of the contributions; e.g. monthly, quarterly, bi-annually or annually.
A contributor can only withdraw once after every two years on each contribution.
Only 50% of the contribution shall be available for contingent withdrawal, the remaining 50% is fixed to the RSA balance.
In addition to boosting the contributors' retirement funds, AVC can also serve as a form of targeted savings towards specific projects, such as, mortgages, children’s school fees or a dream vacation.
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