Pensions Terminology is a glossary of terms which is produced in conjunction with the Pensions Research Accountants Group (PRAG).
Its purpose is to encourage all pensions professionals to speak the same language. It is revised and updated periodically and the current (eighth) edition was launched in June 2011. It is now recognised as a standard reference work.
If you have any comments regarding Pensions Terminology contact the Qualifications Department at firstname.lastname@example.org
The Eighth edition of Pensions Terminology is now available for free as a pdf only. You can download it here.
Pensions Terminology (Eighth Edition) is sponsored by Willis Towers Watson.
Copyright to Pensions Terminology has been ceded by PRAG to The Pensions Management Institute in recognition of our educational role. Attention of users is drawn to the existence of this copyright, but as both organisations are anxious to encourage standardisation of terminology for all those associated with pensions, the use of definitions of individual terms is encouraged.
Reproduction of larger sections will normally be permitted on application, provided that such use is acknowledged.
Neither PRAG, nor the members of any working party or committee thereof, can accept any responsibility or liability whatsoever (whether in respect of negligence or otherwise) to any pension scheme trustee or member or third party, wherever situate, as a result of anything contained in or omitted from this publication nor the consequences of reliance or otherwise on the content of this publication.
- AUDITING PRACTICES BOARD (APB)
The Auditing Practices Board is responsible for the development of auditing practice in the United Kingdom and Ireland through the development and issues of standards of auditing. It is a part of the [Financial Reporting Council].
The APB may also issue bulletins to provide auditors with timely guidance on a new or emerging issue; they are persuasive rather than prescriptive. They indicate good practice, even though they may be developed without the full process of consultation and exposure used for APB Standards.
See also [Clarity ISA] and [International Standards on Auditing].
An individual or firm appointed to report on the financial statements of an entity. The results of their examination are incorporated within an [auditor's report], which is signed in the name of the individual or the firm.
See also [independent Auditor], [Scheme Auditor] and [Statutory Auditor].
- AUDITOR'S REPORT
A report given by an [auditor] on a set of [financial statements].
Under the [Audited Accounts Regulations], the [scheme auditor] has to provide a report on a number of matters, including whether the scheme financial statements show a [true and fair view] and contain the information required by those Regulations, as well as reporting on whether the information contained in the [annual report] has any misstatements or material inconsistencies with the financial statements.
See also [Independent Auditor].
- AUDITORS' STATEMENT ABOUT CONTRIBUTIONS
A statement, provided by the [scheme auditor] and required by the [Audited Accounts Regulations], on whether the contributions to the scheme reported in the [summary of contributions], have been paid, in all material respects, at least in accordance with the [schedule of contributions] certified by the [scheme actuary], or with the [payment schedule].
[Practice Note 15], as revised in November 2004, recommended that the statement be made separately from the [Auditor's Report] on the financial statements of the scheme.
This is also referred to as the [Auditor's Statement on Contributions].
The provision of an additional [benefit] or benefits in respect of a particular [member] or group of members of an [occupational pension scheme], where the cost is borne by the scheme and/or the [employer].
- AUTHORISED EMPLOYER PAYMENTS
These are payments that a [registered pension scheme] is authorised to make to a [sponsoring employer] or former employers. These include payments by [public sector pension schemes], authorised employer loans and compensation.
The relevant statutory provision is s175-180 FA2004.
- AUTHORISED MEMBER PAYMENTS
These are payments that a [registered pension scheme] is authorised to make to or in respect of a [member]. These include pension payments permitted by the [scheme rules] (including death benefits), permitted lump sums and recognised transfers. Other payments may be made but they will be unauthorised.
The relevant statutory provision is s164-171 FA2004.
- AUTOMATIC ENROLMENT
The requirement for an [employer] to enrol automatically [eligible jobholders] into a [qualifying scheme]. An individual who is automatically enrolled is free to opt out and can stop saving at any time, but needs to take action to do so.
These requirements come into force over a period of four years from October 2012. The timing depends on the size of the employer.
The relevant statutory provisions are PA2008 and related Regulations.
See also [Registration] and [Staging].
- AUTOMATIC RE-ENROLMENT
If any [jobholder] has opted out, an [employer] will have to automatically re-enrol them provided they are still working for the employer. The re-enrolment process occurs about every three years.
See also [Automatic Enrolment].
- AVERAGE EARNINGS SCHEME
See [career average scheme].