Additional Voluntary Contributions (AVCs)

The basic rules on Additional Voluntary Contributions to the Queen’s Pension Plan differ somewhat from a Registered Retirement Savings Plan (RRSP).

Your AVC limit each year is 18% of your pensionable earnings in that year to a dollar limit of $24,270 for 2013 less your "pension adjustment" in that year. RRSPs work on the basis of the prior year’s information – CRA (formerly Revenue Canada) calculates your 2013 RRSP limit based on your 2012 tax filing, and will indicate your contribution limits when they send your assessment notice regarding the 2012 filing.

So, if you decide to make AVCs in 2013, you can make an RRSP contribution this year as well. When the Pensions & Insurance Unit of the Department of Human Resources calculates your pension adjustment for 2013 (Box 52 on your T4 for 2013), we will include any AVCs made during the calendar year (either through the year by payroll deduction, or by lump sum contribution in December). Therefore, your 2014 RRSP limits will be reduced significantly (and may be eliminated unless you have some carry forward “room” based on unused RRSP limits of prior years).

Monthly AVC Application     (36 KB)

Reasons to make AVCs

1. good rates of return (the same as that experienced by the Queen's Pension Plan)

2. low fees - less than one-half of 1%

3. no concerns over how your money is being managed

4. you can also arrange for payroll deduction, so the tax deduction is factored in by the Payroll Unit of Human Resources

Note: Your AVCs cannot be withdrawn prior to leaving Queen's. If you die in service, the value of your AVC account will be payable to your named pension beneficiary.

At retirement, the funds are yours and you have several options:

• you can withdraw them in cash (but will have to pay tax)
• you can transfer them to your own, non-locked in RRSP, which means they can be subsequently deregistered or used to buy a Registered Retirement Income Fund, or RRIF
• they can be used to provide additional Queen's pension

Reasons to make RRSP contributions instead

1. contributions can be made to a spousal RRSP as a form of income splitting (this can't be done with AVCs), but if your spouse is working this may not be an issue

2. you can tailor your investments to meet specific goals — for example, if you are relatively far from retirement, you might want to take on a bit more risk and invest a higher percentage of assets in equities (the QPP portfolio is balanced — for a more detailed description, please see our Quarterly Report.)
3. the RRSP can be a source of emergency funds

Questions? Contact the Department of Pensions and Insurance.