Pension trust fund

Fund that consists of money contributed by the employer and, in some cases, the employees to provide retirement benefits. Contributions are paid to a trustee who invests the money, collects the interest, and disburses the benefits under the terms of the trust agreement. Pension trusts can be either self-administered or partially insured with benefits purchased from an insurance company by the trustee. Also called trust fund plan.

Pensionable earnings

1. See NET RELEVANT EARNINGS. 2. Pensionable earnings/salary are the earnings on which pension scheme benefits and contributions are calculated as defined in the scheme rules. Normally it refers to total PAYE earnings from the employer for the relevant tax year and therefore includes bonuses, overtime, commissions and benefits in kind. Some final salary schemes may restrict ‘pensionable earnings’ to the member’s basic salary; definitions vary so full PAYE (P60) earnings are not necessarily the scheme’s pensionable earnings.