A

Active Member: An individual who is currently contributing to a pension plan or who has contributions being made on their behalf, and accruing benefits.

Additional Voluntary Contributions (AVCs): Extra payments made by a member to increase their pension benefits on retirement, over and above the standard contributions. This contribution is in addition to the ordinary contribution.

Annuity: A financial product that provides a series of payments made at regular intervals, often for the lifetime of the individual, purchased with a lump sum or over time.

C

Contribution: A payment made to a pension plan by a plan member.

D

Death in Deferment: The event of a deferred member passing away before starting to receive pension benefits.

Death in Deferment: The event of a deferred member passing away before starting to receive pension benefits.

Death in Service: The event of an active member passing away while still employed and contributing to the pension plan.

Deferred Member: An individual who is no longer contributing to the pension scheme OR who draws the pension benefits later than his/her normal retirement age.

Deferred Pension: The pension benefits that have been earned by a member but are not yet payable because the member has not reached the normal retirement age and has left the scheme before retirement or the pension is drawn later than the member’s normal retirement date. 

E

Early Retirement: The option for a member to begin receiving pension benefits before the normal retirement age, usually with a reduction in benefits.

G

Guaranteed Pension: A retirement plan where an employer or pension provider promises a fixed, predictable monthly benefit for life. The benefit amount is based on factors like salary and years of service. The employer assumes the investment risk and ensures sufficient funding for the promised benefits. Guaranteed pensions offer financial security and predictability for retirees but can be costly for employers.

I

Ill Health Retirement: Retirement that occurs before the normal retirement age due to medical reasons.

Interest Rates: The rates at which interest is calculated on the contributions made to a pension plan or on the benefits accrued.

L

Late Retirement: The option to retire after the normal retirement age, often resulting in an increase in pension benefits.

Leaver with Contribution Refund: A member who has left the pension scheme and opted to receive a refund of their contributions, usually available if they have not met the vesting period requirements.

Leaver with Transfer Value: A member who has left the pension scheme and transferred the value of their accrued benefits to another pension scheme.

Lump Sum Payment: A one-time payment made to a member, typically upon retirement, in lieu of or in addition to periodic pension payments.

N

Normal Retirement Age: The age at which a member is eligible to receive full pension benefits, as defined by the pension plan.

O

Ordinary Contributions: Regular, mandatory payments made by both the employee and employer into the pension plan according to the plan rules.

P

Pension Status: The current state or condition of a member’s pension, such as active, deferred, or retired.

Pension Status Sequence: The progression of a member’s status through various stages such as active, deferred, and retired.

Pension Type Plans: Different categories of pension schemes, such as defined benefit plans, defined contribution plans, and hybrid plans.

R

Retirement Type: The classification of retirement based on circumstances, such as early retirement, normal retirement, or ill-health retirement.

S

Spouse Pension: A pension benefit paid to the surviving spouse of a member after the member's death.

T

Transfer Value: The amount of money representing the value of a member’s pension rights that can be transferred to another pension scheme. This amount is calculated by the actuaries of the pension plan administrator.  They will calculate the amount of money (transfer value), that would be needed to provide a pension based on current earnings.

Transfer Value from Employer: The value of pension benefits that an employer transfers to another pension scheme on behalf of a member.

V

Vested: The status of having earned the right to receive full benefits from a pension plan, even if the member leaves the employer before retirement. This typically occurs after a specified period of service or contributions.