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.
- SAFEGUARDED RIGHTS
The part of a [pension credit] awarded after a [pension share] (following divorce) which is attributable to the member's [contracted out] benefits.
- SALARY GRADE SCHEME
A [career average scheme] in which the [benefit] for each year of [pensionable service] depends on the range into which the [member's] earnings fell during that year.
Also known as a [graded scale scheme].
- SALARY RELATED SCHEME
A [scheme] in which benefits are related to earnings. It is a type of [defined benefit scheme].
- SALARY SACRIFICE
An agreement between the [employer] and employee whereby the employee forgoes part of his/her future earnings in return for a corresponding contribution by the employer to a [pension scheme].
- SCHEDULE 3 ORDERS
Orders issued each year in accordance with Schedule 3 PSA93 specifying the rates of increase to be applied to [preserved benefits] over the period from the date of leaving to [normal pension date].
Formerly known as section 52A orders.
- SCHEDULE OF CONTRIBUTIONS
A schedule specifying the [contribution rates] and payment dates, normally agreed between the [employer] and the [trustees] and certified by the [scheme actuary] as being adequate to satisfy the [statutory funding objective].
Required for [defined benefit schemes] subject to s227 PA2004 and The Occupational Pension Schemes (Scheme Funding) Regulations 2005 (SI 2005/3377).
- SCHEME ACTUARY
The named [actuary] appointed by the [trustees] or [managers] of an [occupational pension scheme] under s47 PA95.
The scheme actuary's role includes conducting an [actuarial valuation] and advising on drawing up a [statement of funding principles] and the choice of appropriate assumptions.
- SCHEME ADMINISTRATION REGULATIONS
Regulations issued under PA95 providing for the appointment of professional advisers and the requirement to maintain books and records.
The main regulations is the Occupational Pension Schemes (Scheme Administration) Regulations 1996 (S1 1996/1715).
- SCHEME ADMINISTRATOR
See definition 1of [Administrator].
- SCHEME AUDITOR
The [auditor] appointed by the [trustees] or [managers] of an [occupational pension scheme] under s47 PA95 to report on the scheme [financial statements] and the [summary of contributions].