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.
- RATE OF RETURN
The percentage change in the value of an investment over a specified period, taking into account both the income from it and the change in its market value.
Often expressed as an equivalent annual rate.
See also [Time Weighted Return], [Total Return] or [Money Weighted Return].
- RATING AGENCY
An agency that provide credit ratings for issuers of securities and also individual issues of fixed-income securities.
- REAL ESTATE INVESTMENT TRUST (REIT)
A publicly quoted security that permits investment in property through a typical [investment trust]. As such, the trust is exempt from corporation tax and capital gains tax and can therefore be seen to be the equivalent of direct investment in property.
The REIT share price can move to a premium or discount against the underlying net asset value, as with any [investment trust].
See [pooled investment vehicle].
- REAL RATE OF RETURN
The difference between the [rate of return] of an investment and a selected measure of inflation over the same period.
The measure of inflation used should be specified.
See [Contracted Out Rebate].
- REBATE ONLY PERSONAL PENSION (ROPP)
An [appropriate scheme] which is funded solely by contracted out rebates payable by [HMRC] to the pension provider.
- RECOGNISED OVERSEAS PENSION SCHEME
An [overseas pension scheme] recognised by [HMRC] and listed in The Pension Schemes (Categories of Country and Requirements for Recognised Overseas Schemes and Recognised Overseas Pension Schemes) Regulations (SI 2006/206).
See also [Recognised Transfer]
- RECOGNISED TRANSFER
A transfer payment to another [registered pension scheme] or [recognised overseas pension scheme], in lieu of a [member's accrued rights] in a registered pension scheme.
- RECOVERY PLAN
A plan drawn up by the [trustees] setting out how any funding deficit (on the [statutory funding objective]) reveal by an [actuarial valuation] for a [defined benefit schme] will be met, and over what period.
Meeting the deficit will generally involve additional contributions from the [employer] which will also be shown on the [schedule of contributions].
- REDUCED CASH EQUIVALENT TRANSFER VALUE
The cash equivalent transfer may be paid in certain circumstances where the [scheme actuary] has provided a report certifying that a [defined benefit scheme] would have insufficient [assets] to pay [cash equivalents] in respect of all [members], and the [trustees] have instructed that [transfer values] should be reduced as a result.