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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 payment of retirement benefits to a [member], after [normal pension date].

The benefit may be increased because of late payment.


The age set in [scheme rules] (or otherwise determined), above which a [member] can take a pension with actuarial enhancement.

The relevant statutory provision is The Equality Act (Age Exceptions for Pension Schemes) Order 2010.


An amount to be added when calculating the minimum [benefit] for the purpose of [anti franking requirements], where a [member] continues in [pensionable service] after [contracted out] employment ceases, and the level of earnings is higher when he/she retires or leaves than on ceasing to be contracted out.


A method of determining the premiums payable under an insurance contract so that the premium for each individual remains constant unless there is a change in benefits.


See [gearing].


This term usually refers to the general levy which meets the expenditure of the [Pensions Ombudsman], the [Pensions Regulator] and grants made by the Pensions Regulator (e.g. to [TPAS]). It is payable by [registered pension schemes] and [personal pension schemes].

See also [fraud compensation levy], [pension protection levy] and [PPF administration levy].


Amounts which a [pension scheme] has an obligation to pay now or in the future.

The amounts may not be immediately ascertainable and some liabilities may be dependent on the occurrence of future events.

See also [current liabilities].


Any [investment strategy] that has a [benchmark] that is specific to the [liabilities] of the [pension scheme]. The objective is that the changes that occur in the value of the investments will be matched to the changes in the value of the investments.


A rule in an [occupational pension scheme] under which an [employer] may recover from the scheme any money due to it through a criminal, fraudulent or negligent act or omission by the employee.

Restrictions on such a rule are contained in s91-s95 PA95.


A scheme that provides a [benefit] only on the death of a [member] (normally on death in service).

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