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Pensions Terminology

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 qualifications@pensions-pmi.org.uk


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.

Willis Towers


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.

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The statutory debt due from the [employer] to a [defined benefit scheme] (subject to exceptions) where the [assets] are insufficient to meet the [actuarial liabilities] calculated on a prescribed basis. Broadly, the debt can be triggered on [winding up] the scheme, on liquidation of the employer and on an employer leaving a scheme on it ceasing to employ any scheme members. In many circumstances the debt is calculated by reference to full [annuity] [buy out] costs.ΒΆΓΏ

The relevant statutory provisions are s75 and s75A PA95 (as amended by PA2004) and The Occupational Pension Schemes (Employer Debt) Regulations 2005 (SI 2005/678) as amended.


A formal document or part of a document establishing a [trust].


A legal document which in England and Wales makes it clear that it is intended to be a deed and which, in the case of an individual, is signed in the presence of an attesting witness or, in the case of a corporation, is executed in accordance with company law (s1, Law of Property (Miscellaneous Provisions) Act 1989).

In Scotland, deed has no technical legal meaning, although it is used in practice to describe some documents. These would normally then be executed in accordance with the Requirements of Writing (Scotland) Act 1995.


A [deed] admitting a new [employer] to an [occupational pension scheme] and containing an undertaking by the new employer to comply with the provisions of the scheme. Also referred to as a [deed of participation].


A [deed] by which a new [trustee] is appointed.


Sometimes used for [deed of adherence].


See [deed of adherence].


A [deed] made by one party for the benefit of (and enforceable by) specified persons who are not parties to the deed.


An option that is selected automatically unless an alternative is specified.

This is commonly used in [defined contribution schemes] in relation to choosing investment funds.


The default retirement age was introduced by the Employment Equality (Age) Regulations 2006 and allows employers to dismiss employees when they reach 65 without having to justify the dismissal. These provisions and the DRA have been replicated in the Equality Act 2010. The DRA was abolished with effect from 6 April 2011.

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