Jargon buster
Don’t know your APCs from your ABS? Search the pension terms below to find out what they mean.
| Terms | Definition | Resources |
|---|---|---|
| Annual allowance (AA) | The maximum amount of pension that HMRC allows you to build up in any one tax year without paying tax. | Learn more |
| Annual benefit statement (ABS) | A summary of your pension benefits for the year up to 31 March. | Learn more |
| Additional pension contributions (APC) | Additional contributions you can pay on top of your regular pension contributions to buy extra pension in the LGPS. | Learn more |
| Additional regular contributions (ARC) | Extra pension that's payable when you retire on top of your standard LGPS benefits - bought by paying additional contributions. | |
| Additional voluntary contributions (AVC) | An arrangement that allows you to build up pension benefits with a separate AVC provider alongside your LGPS pension. | Learn more |
| Career Average Revalued Earnings (CARE) pension | A new type of pension scheme that was set up in 2014 (2015 for Police and Firefighter schemes). | |
| Cash equivalent value (CEV) | The value of each pension arrangement that is sought in a divorce case. | |
| Consumer Price Index (CPI) | Measures the overall change in consumer prices based on a representative basket of goods and services over time. | |
| Accrual rate | The rate at which you build up pension benefits when you're a member of a defined benefit scheme. | |
| Accrued pension | How much pension you have built up. | |
| Added years | A contract to buy extra years’ service (you would have opened separately). | |
| Aggregation | If you have more than one Local Government pension in the same scheme you will be given the option to combine your pots into one. | Learn more |
| Beneficiary | A person or group who receives money or other benefits as a result of something else, such as a will or your death grant. | |
| Benefit crystallisation | A test at the date of taking your pension to check against the lump sum limits. | |
| Cash equivalent transfer value (CETV) | The amount your current defined benefit pension scheme will offer you if you want to transfer into a defined contribution scheme. | |
| Co-habiting partner | A partner you are living with for two years or more, as if you were a married couple - you're free to marry each other and are financial interdependent on each other. | |
| Commutation | Where you swap some of your pension to increase or create a tax-free lump sum at retirement (up to 25 per cent of your pension). | |
| Concurrent | Two or more records that have been active at the same time. | |
| Death grant | A lump sum that may be payable in the event of your death. | |
| Deferred benefit / frozen / preserved | 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're payable from age 55 with reductions or from your Normal Pension Age without reductions). | |
| Department of Work & Pensions (DWP) | The UK Government department responsible for welfare, pensions and child maintenance policy. | |
| Estimate / forecast / projection | An estimate of the benefits (not guaranteed) that you could receive at a certain date of your choice. | |
| Frozen refund | Where your refund is frozen until you claim it or transfer out the benefits (if you leave the scheme with less than two years’ service). | |
| Full-time equivalent (FTE) | An employee's scheduled hours divided by the employer's hours for a full-time working week. | |
| Transfer value | Your pension benefits calculated and converted into a single cash sum (they would only be payable to a recognised pension scheme). | |
| Government Actuary’s Department (GAD) | The UK Government department that provides actuarial solutions, including risk analysis, modelling and advice to support the UK public sector. | |
| Guaranteed Minimum Pension (GMP) | A sum of money that is paid to members of occupational pension schemes, who were contracted out of the State Earnings Related Pensions Scheme (SERPS) between 6 April 1978 and 5 April 1997. | Learn more |
| His Majesty’s Revenue & Customs (HMRC) | The UK's tax, payments and customs authority. | |
| Internal Dispute Resolution Procedure (IDRP) | This is a two-stage complaints process put in place for if you disagree with decisions made by your Employer or Pension Fund in relation to your benefits. | Learn more |
| Pension scheme valuation | These take place around every three or four years and are designed to check whether schemes have appropriate funding levels to meet their liabilities. | |
| Local Government Pension Scheme (LGPS) | A national pension scheme for people working in local government or working for other employers that participate in the scheme. | Learn more |
| Lifetime allowance (LTA) | The maximum amount of pension benefits that HMRC allowed you to receive without paying extra tax. Please note, the lifetime allowance was abolished from 6 April 2024. | Learn more |
| Money and Pensions Service (MaPS) | A UK body that provides high-quality money and pensions guidance and debt advice (previously The Pensions Advisory Service (TPAS)). | |
| PensionPoint | Our online portal that allow you to view, update and download personal information about your workplace pension. | Learn more |
| New starter / Admission / joiner | When you've started in a job where you have been brought into a pension scheme. | |
| Nomination | You should make a nomination to express who you wish to receive your death grant. | Learn more |
| Nominated beneficiary | Your chosen recipient of your lump sum (death grant) in the event of your death. | Learn more |
| Normal Pension Age (NPA) / Normal retirement date | The age you can receive your pension in full under the scheme rules. | |
| Survivor's pension | A pension payable to your spouse, civil partner or co-habiting partner from your date of death. | |
| Pay as you earn (PAYE) | Refers to income tax that's deducted from your salary before you receive it (you may pay this on your pension if it's over the tax-free threshold). | |
| Pension increase (PI) | One of the benefits of having an LGPS, Police or Firefighter pension is that the value of the pension you are receiving, or your deferred benefits, increases in line with inflation. | Learn more |
| Final pay | This is usually the pay for your final year that you have paid pension contributions in a scheme, or one of the previous two years if the pay then was higher. | |
| Pension Sharing Order (PSO) | A court order that sets out how much of a pension(s) will be given to you or your ex-spouse during a divorce. | |
| Power of Attorney (POA) | The authority to act for another person in specified or all legal or financial matters. | |
| Pro rata | Meaning equal in proportion, if you have worked part time your service will be scaled down to reflect this. | |
| Reductions | The amount your pension is reduced if it is taken before your normal pension age. | |
| Refund | If you haven't met your scheme's 'vesting period' you can choose to take a refund and we will pay back your contributions minus any tax. | Learn more |
| Lump sum / retirement grant | When you take part of your pension as a one-off cash payment, instead of receiving all of it in monthly instalments (also known as a pension commencement lump sum). | |
| State pension age (SPA) | The earliest age you can start receiving your state pension. | |
| Transfer in (TVI) | The process of transferring your previous pension to your current one. | Learn more |
| Transfer out (TVO) | The process of transferring your current pension to another scheme. | Learn more |
| Trivial commutation | The term for taking all of your pension as a one-off lump sum. | Learn more |
