login Forgotten password? Register

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.


The minimum pension which a salary related [occupational pension scheme] must provide for the surviving spouse or civil partner of a [member] in respect of [contracted out] contributions paid between April 1978 and April 1997, as one of the conditions of [contracting out].


The process of terminating an [occupational pension scheme] (or less commonly a [personal pension scheme]), usually by applying the [assets] to the purchase of [immediate annuities] and [deferred annuities] for the beneficiaries, or by transferring the assets and [liabilities] to another pension scheme, in accordance with the scheme documentation or statute (s74 PA95).

There are statutory provisions to determine when winding up commences for statutory purposes. For schemes which commenced wind-up before 6 April 2005 see Regulation 2, the Occupational Pension Schemes (Winding Up) Regulations 1996 (SI 1996/3126), or wind-up after 6 April 2005 see The Occupational Pension Schemes (Winding up etc) Regulations 2005 (SI 2005/706)).

See also [Priority Rule].


An insurance policy under which a share of the [surplus] disclosed by an [actuarial valuation] of the insurance company's life and pensions business is payable as an addition to the guaranteed benefits or in reduction of future premiums.


This sets out proposals for the payment of the modified debt usually to permit the cessation [employer] to pay a lesser amount on exit from a [defined benefit] multi-employer [occupational pension scheme] than the full [section 75 debt].

It is legally It is a legally binding document setting out payment between the cessation employer, the guarantor and the [trustees], which is approved by the [Pensions Regulator]. Comprehensive guidance is set out on the Pensions Regulator's website.


Tax deducted from overseas investment income, which can normally be claimed back.


In the context of automatic enrolment, an employer or a person who has contracted to provide services to an [employer].


A measure of the annual income earned on an investment. Normally expressed as a percentage of its market price.


A graphical representation of the relationship between the [yields] of [bonds] over different maturity periods.

An inverted yield curve indicates that the yield on long dated bonds is lower than that on bonds of shorter maturity, which is thought to be against established market principles.


The difference in yield between different [asset classes]; the most frequently quoted yield gap is that between [gilts] and [equities].

  1. 1
  2. ...
  3. 70
  4. 71
  5. 72
  6. 73
  7. 74
  8. 75
  9. 76
  10. 77
  11. 78
  12. 79