A jargon buster of frequently used pensions terminology and acronyms.
Jargon Buster
| Jargon | Word/Phrase to use | Definition |
| Accrual | Pension build up | How much pension you have built up. |
| Added Years | Added Years | A contract to buy extra years’ service. This is a contract you would have opened separately. |
| Aggregation | Combining | If you have more than one pension record in the same fund you will be given the option to combine your pots into one. |
| Benefit Crystallisation | Payment of benefits | A test at the date of taking your pension to check against the lifetime allowance. |
| Co-habiting / living together / sharing a home | Co-habiting | A cohabiting partner is a partner you are living with for a period of two years of more, as if you were a married couple, are free to marry each other and are financial interdependent on each other. |
| Commutation | Swap/convert | You can swap some of your pension to increase or create a tax free lump sum at retirement, up to 25% of your pension pot. |
| Concurrent | Two or more records that have been active at the same time. | |
| Death grant gratuity | Death grant lump sum | A lump sum that may be payable on the event of your death. |
| Deferred benefit / frozen / preserved | Deferred benefit | Your benefits will become deferred if you no longer contribute to the scheme and have met the vesting period, and do not claim your pension. They will be payable from age 55 with reductions. |
| Eligible retirement date | Normal pension age | The date you can take your benefits without any reductions. |
| Estimate / forecast / projection | Estimate | An estimate of the benefits you could receive at a certain date of your choice. These are estimated figures and are not guaranteed. |
| Frozen refund | Frozen refund | if you leave the scheme with less than 2 years’ service, we will calculate the refund owed to you. This will be frozen until you claim the refund or transfer out the benefits. |
| Fund Value | Fund Value | A fund value is your pension rights calculated and converted into a single cash sum. This would only be payable to a recognised pension scheme. |
| Latest Valuation | Pension built up so far | The amount of pension you have built up to date that would be payable from your normal pension age. |
| PensionPoint | Your online pensions portal | PensionPoint is an online portal for you to view your online records, update your expression of wish and run estimates. |
| New starter / Admission / joiner | New joiner | If you start a job in which you are eligible for membership of the LGPS you will be brought into the scheme. Your employer will automatically deduct your contributions. |
| Nomination | Expression of wish | You should complete an expression of wish form so that your wishes as to who you would like to receive any death grant can be considered. You can complete this form, or make a new one, at any time through your online account. |
| Normal retirement date | Normal pension age | The date you can take your benefits without any reductions. |
| Partner / survivor / spouse / dependant | Partner | A pension payable to your spouse, civil partner or co-habiting partner from your date of death. |
| PAYE | Income tax | You may pay income tax on your pension if it is over the tax-free threshold. |
| Pensionable renumeration | Final salary | This is usually the pay in respect of (i.e. due for) your final year of scheme membership on which you paid contributions, or one of the previous 2 years if this is higher. |
| Pro rata | Pro rata | If you have worked part time your service will be scaled down to reflect this. |
| Reductions / penalty | Reductions | The amount your LGPS pension is reduced if it is taken before your normal pension age. |
| Refund | Refund | If you have less than 2 years’ service and choose to take a refund, we will pay back the contributions minus any tax. |
| Retirement grant / lump sum | One off lump sum payment | If you joined before 01/04/2008 you will be entitled to an automatic lump sum. Regardless of when you joined the scheme you will be able to swap pension for a lump sum. |
| Trivial commutation | Small pot lump sum | Some pension pots that are smaller than £30,000.00 could be paid as a one-off taxable lump sum. |
Acronyms
AA Annual Allowance
APC Additional Pension Contributions
ARC Additional Regular Contributions
AVC Additional Voluntary Contributions
CARE Career Average Revalued Earnings
CETV Cash Equivalent Transfer Value
CEV Cash Equivalent Value
CPI Consumer Price Index
DWP Department of Work & Pensions
FTE Full Time Equivalent
GAD Government Actuary’s Department
GMP Guaranteed Minimum Pension
HMRC Her Majesty’s Revenue & Customs
IDRP Internal Dispute Resolution Procedure
LGPS Local Government Pension Scheme
LTA Lifetime Allowance
MaPS Money and Pension Service (formerly TPAS)
NPA Normal Pension Age
PI Pension Increase
POA Power of Attorney
PSO Pension Sharing Order
RPI Retail Price Index
SPA State Pension Age
TVI Transfer In
TVO Transfer Out