Glossary

Accrual Rate

The rate at which rights build up for each year of pensionable service in a defined benefit scheme.

Alternative Governance Structure (AGS)

Allows a company and its employees to remain involved in the management of a pension scheme but without the liability associated with being a trustee.

Auto-Enrolment

Law introduced by the government requiring all employers to enrol their workers into a qualifying workplace scheme if they are not already in one. To take effect from 1st October 2012.

Compensation

The term used by The Pension Protection Fund (PPF) to describe your pension

Consumer Price Index (CPI)

The CPI measures changes in the price level of consumer goods and services purchased by households.

Contract Based Pension Governance

A trust board, a Pensions Management Committee, and a Pensions Committee

Defined Contribution Governance

See Defined Contribution (DC) Scheme

Deferred Member

An occupational pension scheme member who has left service with a deferred pension or fund

Defined Benefit (DB) Scheme

A scheme where the scheme rules define the benefits independently of the contributions payable, and the benefits are not directly related to the investments of the scheme. The scheme may be funded or unfunded.

Defined Contribution (DC) Scheme

A scheme which determines the individual member’s benefits by reference to contributions paid into the scheme in respect of that member, usually increased by an amount based on the investment return on these contributions. Sometimes referred to as a money purchase scheme.

Document Vault

A secure storage facility provided by PTL for scheme documents. Cataloguing and easily accessible and certified copies supplied as required.

Escrow Agent

An independent trusted third party appointed on behalf of transacting parties to hold money whilst a transaction is carried out between the 1st & 2nd parties.

Expert Witness

A written or verbal testimony on contemporaneous practice so that actual behaviour can be compared against it – a legal service

FAS Scheme

The Financial Assistance Scheme (FAS) offers help to people who have lost out on their pension because they were a member of an under-funded defined benefit scheme that started to wind-up between 01 January 1997 and 05 April 2005.

Fully Funded

A pension plan that has sufficient assets needed to provide for all accrued benefits.

Funding Negotiation

The discussions between the Trustees and Employer regarding the amount the Employer can reasonably afford to pay to the scheme as contributions. This takes place as part of obtaining an actuarial valuation for the scheme. The actuary may also be involved in these negotiations.

Governance Audit

A PTL service for Pension schemes to ensure the trust deeds and rules are complied with and that trustees are up to date with changes in the law and regulations have to be kept up with and complied with.

Group Life Master Trust

A service launched by PTL in 2010. The Group Life Master Trust is designed for those employers with life only members. Rather than set up and run their own life assurance trust, they can now use the Master Trust, saving time, effort and money as well as reducing risk.

Group personal pension (GPP) plans (Contract-based)

Group personal pensions (GPP) are personal pensions arranged by an employer fr the benefit of its employees.

Independent Trustee

A trustee who is unrelated to the person who establishes a trust (the grantor) and the beneficiaries of the trust.

Investment Committees

Service offered by PTL to manage a pension scheme’s investments. Our team of experts includes Manager’s with Investment Consultant backgrounds

Master Trust

A collection of funds from individual investors that are pooled together in order to obtain wholesale prices and rates unavailable for regular investors.

Member Nominated Trustee (MNT)

A trustee that has been voted into position by some or all of the scheme’s members

Myners Report

A report to HM Treasury in March 2001 on institutional investors. It was delivered by Paul Myners and set out a code of principles for trustees to follow covering aspects such as effective decision making, performance measurement and communication with members.

National Employment Savings Trust (NEST)

New low cost national pension scheme being introduced from October 2012, starting with larger employers.  Employers will be able to automatically enroll their employees into this arrangement. NEST applies to jobholders between the ages of 22 and SPA and earning £7745pa. Job holders include temporary, agency and permanent workers.

Non Pension – Trusteeships

Professional Trustee Service offered by PTL to Trusts other than Pension Schemes e.g Family Trusts, Charities, Escrow Agreements

Occupational Pension Scheme (Trust-based)

A scheme set up by an employer to provide pensions and / or other benefits to employees on leaving service, on death or on retirement (excluding death-in-service only arrangements).

Pension Dispute Resolution Service?

A service offered by PTL whereby we can act as an arbiter for pension disputes, including those raised under an Internal Disputes Resolution Procedure.

Pension Protection Fund, The

A fund set up under the Pensions Act 2004 to provide benefits to members of defined benefit schemes that wind up due to the employer’s insolvency with insufficient assets to pay full benefits.

Pensions governance

Making sure a pension scheme is regulated and securing the members’ benefits as quickly as possible at the least cost to the sponsor

PSBCS (Pension Scheme Budget Control Service)

An outsourcing service provided by PTL with the aim to control and reduce the process costs of your pension scheme and to give you comfort that your service provider spend is being optimized

Risk Management

The assessment and measures taken to reduce the risk, financially, morally and legally. PTL offer a service to help trustees identify and prioritise the risks of running a pension scheme.

Scheme Administrator

It is a legal requirement for all registered pension schemes to have a scheme administrator. They are repsonsible for registering the Pension Scheme with HMRC, reporting all events relating to the scheme to the HMRC, providing information to scheme members and paying tax charges.

Secretarial Service

A service offered by PTL to help trustees to comply with their legal obligations and good practice by ensuring that Trustees give formal notice of meetings and that they keep an audit trail of all of their decisions as requested by The Pensions Regulator

Section 615

A Section 615 (S615(6)) scheme allows UK Limited Companies to establish retirement benefit packages for employees who have duties outside the UK. S615(6) schemes are not ‘off-shore’ solutions – the superannuation fund is established in the UK and enjoys the credibility that schemes recognised in an EU Member state have over schemes established in off-shore jurisdictions.

The Governance Template

A framework for the good governance of a pension scheme.

The Pensions Regulator

An independent body set up under the Pensions Act 2004 to regulate occupational pension schemes from 6 April 2005. Its role is to protect members of occupational pension schemes, to promote good administration of schemes and to reduce the risk of situations arising ‘that may give rise to a claim on the Pension Protection Fund.’ It has the power to impose orders and fines on trustees and employers.

TKU Management

A PTL Services designed to help trustees ensure they are up to date and meeting the standard requirements of the Trustee Knowlegde and Understanding code of practice

Trust Deed & Rules

A legal document, or documents, executed in the form of a deed, which establishes and regulates a trust.

Trustee

An individual or company appointed to carry out the purposes of a trust in accordance with the provisions of the trust instrument and general principles of trust law.

Trustees Knowledge and Understanding (TKU/Trustee Training)

Code of practice outlining how trustees should approach training and development.

Under-Funded Pension Plan

A company retirement plan that has more liabilities than assets

Winding up

The process of terminating an occupational 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 and statute.