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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

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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

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.

Liability

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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PAID UP BENEFIT

A [preserved benefit] which is fully secured for an individual [member] under a contract of insurance under which premiums have ceased to be payable in respect of that member.

PAID UP PENSION (PUP)

See [paid up benefit].

PAID UP SCHEME

A [closed scheme] where no further contributions are payable, no further benefits accrue and [members] are entitled to [preserved benefits].

The [assets] of the scheme continue to be held by the [trustees] to be applied in accordance with the [scheme rules].

PARTICIPATING EMPLOYER

An [employer], some or all of whose employees have the right to become [members] of an [occupational pension scheme].

PASSIVE INVESTMENT MANAGEMENT

A style of managing a portfolio by linking the investments to a particular index, such as the FTSE All Share Index, so that the portfolio value moves in line with that index.

See also [tracker fund].

PASSPORT

A certificate issued by the Government Actuary's Department (enduring for up to 2 years) confirming that a named private sector pension scheme is [broadly comparable] to a specific [public service pension scheme].

"Assessment Of Broad Comparability Of Pension Rights" is a Statement of Practice (issued by the Government Actuary's Department) of how Broad Comparability is tested in transfers out of the public sector.

PAST SERVICE

[Pensionable service] before a specified date.

PAST SERVICE BENEFIT

A benefit granted for [past service] and/or [pre scheme service].

PAST SERVICE COST

Used in [FRS 17] and [IAS 19] to mean the increase in the [present value] of the [scheme liabilities] related to employee service in prior periods arising in the current period as a result of the introduction of, or improvement to, retirement benefits.

PAST SERVICE RESERVE

Generally used to describe the [present value] of all benefits accrued to the date to which the calculations relate by reference to projected earnings.

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