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Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
A-Day
6 April 2006. The effective date when the HMRC introduced a single tax regime for all UK pension schemes.
Accrual Rate
The rate at which your benefits build up for each year of pensionable service in the Scheme. It is expressed as a fraction e.g. 1/60th.
Additional Voluntary Contributions (AVCs)
Contributions that a member elects to pay over and above their normal contributions, to an occupational pension scheme, in order to secure additional benefits. Please note the OUP AVC facility was closed to new entrants in March 2006.
Annual Allowance
The maximum amount of pension that can be built up in a tax year without giving rise to a tax charge. The annual allowance for the 2011/12 tax year is £50,000 per annum.
B
Basic State Pension
The flat rate state pension paid to all who have met the minimum NI contribution requirement.
Beneft Crystallisation Event (BCE)
An event where pension benefits become payable i.e. retirement, and at which time a test against the lifetime allowance will occur.
C
Cash Equivalent Transfer Value (CETV)
The amount offered to a member who wants to transfer to another registered pension scheme. CETVs are not available for current members unless they are required for divorce purposes.
Cash Transfer Sum
The amount of transfer payment available to a member leaving the Group Pension Scheme with more than 3 months' but less than 2 years' service.
Civil Partner
Those in a same sex relationship who have entered into a Civil Partnership in accordance with the Civil Partnership Act 2004.
Commutation
The process where a member gives up part of their pension in exchange for a tax-free lump sum payment.
Commutation Factors
Factors used to determine the amount of pension which needs to be given up in exchange for a tax-free lump sum payment.
Consumer Price Index (CPI)
One of the measures of inflation used by pension schemes to calculate pension increases. CPI tracks inflation based upon the changes in the price of a basket of consumer goods brought in the UK.
Contracted Out
A pension scheme is contracted out where it provides benefits in place of the State Second Pension. The Group Pension Scheme is a contracted out scheme.
D
Death in Service Lump Sum
If you are a member of the Group Pension Scheme or the Stakeholder Scheme your dependants would receive a lump sum of 4 times your Pensionable Salary (or, if higher your actual earnings in the last 12 months).
If you are not a member of the Group Pension Scheme or the Stakeholder Scheme your dependants would receive a lump sum of 1 times your Pensionable Salary (or, if higher your actual earnings in the last 12 months).
Deferred Member
A member of the Group Pension Scheme who has left the employment of the Press but has not yet retired from the Scheme. Also referred to as a Preserved Member.
Deferred Pension/Benefit
The benefit that a deferred member has earned from their membership of the Scheme. This benefit is increased in line with RPI up until retirement.
Defined Benefit (DB) Scheme
An occupational pension scheme where the benefits provided are based on accrual rate, pensionable salary/final pensionable salary and pensionable service.
Defined Contribution (DC) Scheme
A scheme that provides money purchase benefits.
Department for Work and Pensions (DWP)
The government department with overall responsibility for the rules governing pension schemes and the administration of the state pension.
Dependant
An individual who is eligible to receive benefits, i.e. a pension and/or lump sum, following the death of a scheme member.
A spouse or civil partner will qualify automatically as a dependant. A natural or legally adopted child may be regarded as a dependant up to the age of 18, or (if the Trustees determine) under age 23 and in full time education.
If you are not married or in a registered civil partnership at the date of your death, the Trustees have the discretion to pay a pension to another person. However, Trustees will only consider such dependants' pensions to be payable where financial dependancy on the member can be demonstrated.
E
Early Leaver
A pension scheme member who leaves service before reaching their normal retirement age, without taking immediate retirement.
Early Retirement Factor
Age-related factor, supplied by the Scheme Actuary, which determines how much a pension should be reduced by for early payment.
Earnings Cap
It used to be the remuneration limit on calculating occupational pension scheme benefits. The earnings cap has been retained by the Group Pension Scheme for calculating maximum benefits. The notional earnings cap for the 2010/11 tax year is £123,600.
Enhanced Protection
Enhanced protection is a transitional arrangement for members of approved pension arrangements whose total pension benefits as at 5 April 2006 either exceeded the lifetime allowance for the 2006/07 tax year of £1.5m or whose benefits are likely to exceed the lifetime allowance applicable when they retire.
Registering pension benefits for enhanced protection by 5 April 2009 will prevent a lifetime allowance charge of up to 55% applying to any benefits which exceed the lifetime allowance. The key stipulation in registering for enhanced protection is that no further pension savings can be made after 5 April 2006.
Expression of Wish Form
A form for members to complete indicating their preferences as to who should receive any lump sum pension benefits that are payable at the Trustees' discretion. A copy of the Expression of Wish form can be downloaded here.
F
Final Pensionable Salary
Final Pensionable Salary means the greater of:
i) the annual average of your Pensionable Salary in any three consecutive years commencing on a 1 April during the ten years before your Normal Retirement Date, and
ii) your basic annual earnings during any one of the last five complete years commencing on a 1 April before your Normal Retirement Date PLUS the average of all fluctuating earnings (e.g. overtime) except any non-pensionable pay as notified by the Press during that year and the preceding two years
Subject to any upper limit which may be set by the Scheme.
Final Salary Scheme
Fixed Protection
Fixed protection is a transitional arrangement for members of approved pension arrangements who do not have Primary Protection or Enhanced Protection.
If you expect your pension savings to be more than £1.5 million when you come to take your benefits on or after 6 April 2012 you can use fixed protection to protect them from the lifetime allowance charge.
Applications for Fixed Protection must be received by HMRC by no later than 5 April 2012
G
Guaranteed Minimum Pension (GMP)
The minimum pension which a defined benefit scheme must provide in respect of contracted out contributions paid between April 1978 and April 1997.
H
HM Revenue and Customs (HMRC)
A government department, formed by the merger of the Inland Revenue and HM Customs and Excise in 2005, that handles the tax approval of pension schemes and the taxation of contributions and benefits.
I
Ill Health Early Retirement
If you have to retire early at any age, due to serious ill health, which in the opinion of the Trustees is sufficiently serious to prevent you from following your normal occupation or to impair seriously your earning ability (and provided the relevant test prescribed by tax legislation is satisfied), you may be able to receive an immediate pension. This would be based on your Final Pensionable Salary and Pensionable Service, but the pension would not be reduced for early payment.
J
K
L
Late Retirement
If you choose to work beyond your Normal Retirement Date, you can cease contributing to the Scheme and postpone taking your benefits until you actually retire. Your benefit will be increased to reflect late payment.
Lifetime Allowance
The overall limit on your tax-privileged savings for retirement. The lifetime allowance for the 2011/12 tax year is £1.8 million, and will reduce to £1.5 million in the 2012/13 tax year.
Life Cover
M
Member Nominated Trustee (MNT)
A Trustee who is elected into their position by the Group Pension Scheme members.
Money Purchase
The provision of an indivdual member's benefits based on the contributions paid into a pension scheme by or in respect of that member, usually increased by the investment return on those contributions.
N
National Insurance Contribution (NIC)
Payments deducted from your pay, used by the DWP to fund the state pension and other state benefits.
National Insurance Contributions Office (NICO)
A part of HMRC. They administer the collection of National Insurance Contributions.
Normal Pension Date
If you were employed on or after 1 April 2006 your Normal Pension Date is your 65th birthday.
If you were employed between 1 February 2003 and 31 March 2006 your Normal Pension Date is your 60th birthday.
If you were employed before 1 February 2003 your Normal Pension Date is your 60th birthday except if you were employed before April 2000 when Normal Pension Date means your 65th birthday; if you elected for enhanced accruals between April 2000 and April 2002 your Normal Pension Date may be different.
O
Occupational Pension Scheme
A scheme set up by an employer to provide retirement and/or death benefits to employees.
Opting Out
This is where a member leaves the Group Pension Scheme whilst remaining employed. It may also be where a member declined to join the Group Pension Scheme at their first opportunity (if employed before 1 April 2006).
Overseas Pension Scheme
A pension scheme that is established in a country outside the UK (certain conditions apply) and is not a registered pension scheme.
P
Pension Commencement Lump Sum
On retirement, a member can exhange part of their pension for a lump sum payment. This is often referred to as tax free cash.
Pension Earmarking
Provides a spouse/civil partner with a share of a pension scheme member's pension rights on divorce/dissolution of a civil partnership. The spouse/civil partner's share is paid when the member retires.
Pension Payment Date
If you were employed before 1 April 2006 your Pension Payment Date is your 60th birthday. This is the earliest you are entitled to take your benefits without reduction.
If you were employed on or after 1 April 2006 your Pension Payment Date is your 65th birthday.
Pension Sharing
Provides a spouse/civil partner with a share of a pension scheme member's pension rights on divorce/dissolution of a civil partnership. The spouse/civil partner is given a credit to put towards their own retirement benefits.
Pensionable Salary
If you are a member of the Group Pension Scheme and were employed before 1 April 2006 then your pensionable salary is your total earnings in the previous year to 31 March, excluding any non-pensionable pay as notified by the Press. Any freelance or fee form payments will be included unless you have completed a waiver form to exclude them.
If you are a member of the Group Pension Scheme and were employed on or after 1 April 2006 then your pensionable salary is your total earnings in the previous year to 31 March, excluding overtime and fee form earnings (and excluding any other non-pensionable oay as notified by the Press).
Pensionable salary is calculated each 1 April. If you are a new employee your pensionable salary will be your starting salary.
Pensionable Service
The number of complete years and months of continuous employment as a contributing member of the Group Pension Scheme.
Preserved Member
See Deferred Member
Preserved Pension/Benefit
Primary Protection
Primary protection is a transitional arrangement for members of approved pension arrangements whose total pension benefits as at 5 April 2006 exceeded the lifetime allowance for the 2006/07 tax year of £1.5m.
Registering pension benefits for primary protection by 5 April 2009 may prevent a lifetime allowance tax charge of up to 55% applying to any benefits which exceed the lifetime allowance. The level of protection increases in line with the lifetime allowance from the 2006/07 tax year to the year in which benefits are taken.
Q
Qualifying Recognised Overseas Pension Scheme (QROPS)
An overseas pension scheme that fulfils certain HMRC requirements in relation to transfers. A list of QROPS is available on the HMRC website. Click to view QROPS list.
R
Registered Pension Scheme
A scheme is a registered pension scheme, either by:
i) being registered with HMRC or
ii) being an approved pension scheme on 5 April 2006 and therefore gaining registered status automatically.
Retail Prices Index (RPI)
One of the methods of inflation used by pension schemes to calculate pension increases. RPI tracks inflation based upon changes in the price or goods and services bought in the UK.
Scheme Actuary
The named actuary appointed by the Trustees of the Group Pension Scheme to carry out valuations and advise on funding matters.
State Earnings Related Pension Scheme (SERPS)
The name given to the earnings related part of the state pension between April 1978 and April 2002.
Spouse
Spouse means your lawful spouse at the date of your death.
State Pension Age (SPA)
The minimum age that the State Pension can be taken. Historically, this has been age 65 for men and age 60 for women. Between 2010 and 2020 the State Pension age for women will rise from 60 to 65. There will be a further increase for both men and women to age 68 by 2046.
Click here to calculate your State Pension Age.
State Second Pension (S2P)
Introduced with effect from 6 April 2002. This is the earnings related part of the state pension paid in addition to the basic state pension. Formerly known as SERPS. The OUP Group Pension Scheme is contracted out of S2P.
Statutory Money Purchase Illustration (SMPI)
Annual statements sent to members of defined contribution schemes. The statement gives a forecast of retirement benefits (in today's terms). Members who have an AVC fund will receive an SMPI statement each year.
T
Triviality
If a member is at least age 60 and has total pension rights (from all registered pension schemes) valued at less than 1% of the lifetime allowance, the member may be able to take all of their pension rights as a lump sum.
Trust Deed and Rules
A legal document that establishes an occupational pension scheme and defines how the scheme will be run.