tax-exempt annuity, death in service and other business contracted with the managers of occupational pension schemes or in connection with personal pensions.

Amount allocated to the employer’s profit and loss account for his pension contributions over the period that scheme members are expected to work.

Amount in a pension credited to the former spouse of a pension scheme member following a pension sharing order. Compare with pension debit.

The reduction of a member’s pension by a certain percentage following a pension sharing order that matches the pension credit awarded a former spouse. It is based on the cash equivalent transfer value in regard to the order.

The fraction used in working out a member’s pension entitlement in a final salary scheme. The pension may be one-sixtieth for each year of pensionable service up to a maximum of two-thirds of final salary.

1.The accumulated assets of a pension scheme. 2. Amount built up in an individual’s pension scheme while an active member to fund his retirement benefits. The fund value depends on the level of contributions and investment earnings. Final salary schemes have a notional cash equivalent transfer value (CETV) which is calculated actuarially to give the fund value that would arise in the event of the member leaving the scheme at the date of the calculation.
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See: pension plan.

Methods used at each valuation to fix the contribution rate for the scheme. A number of different types of methods exist. The accrued benefit method and the projected benefit method are popular in the UK.

A legally binding undertaking from the pension provider that payments to a pensioner will continue for a given term, or up to a specified amount, regardless of the pensioner’s earlier death.