1. A pension based on accrued benefits from an individual’s membership of a previous pension scheme. The preserved benefits remain frozen until the scheme’s normal retirement age for members with two or more years service. In final salary schemes the deferred pension can attract See discretionary benefits. DEFERRED PENSIONER. 2. The term is also used when a member takes a pension later than the normal retirement age.

A former active member of an occupational pension scheme whose benefits remain in the scheme as preserved benefits until transferred to a new scheme or a personal pension or drawn as a pension at a later date. See DEFERRED PENSION.

A period of delay prior to the payment of benefits in respect of any claim under an income protection insurance. The period may be 4, 13, 26 or 52 weeks chosen by the insured based on the period during which full salary is payable under the employment contract. Compare with WAITING PERIOD.

An aviation insurance clause that applies when the premium is payable by instalments. If an instalment is not paid the clause: (a) terminates cover at midnight on the day concerned; and (b) requires the payment of the outstanding balance if the claims exceeds the premium instalments paid.

A clause in a reinsurance or other agreement that specifies that deficits shall be carried forward and offset in arriving at any profit commission due to the reinsured. Deficits may be carried forward to extinction or for a limited period, e.g. three or five years.
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A condition in a treaty which requires that a deficit at the end of one Underwriting year be carried forward into the account for the next year, when determining the overall profit in a profit commission statement.

An accrued benefits valuation in which the actuarial liability for active members is based on the benefits that would arise if the scheme were to discontinue at the valuation date. The standard contribution rate is the rate required to cover both the cost of benefit payments in the ongoing scheme and the accrued benefits in the event of future discontinuance at the end of the control period.

Occupational scheme under which the retirement benefits are fixed by formula (e.g. 1/60th or 1/80th of final pensionable pay for each year of pensionable service). The employer undertakes to make whatever contributions, taking account of any employee contributions, are necessary to secure the pensions. Most schemes are final salary schemes, and are subject to Inland Revenue limits if they are exempt approved schemes.

Occupational pensions scheme where an employee’s retirement benefits depend on (a) the amount of contributions and investment income on these contributions, and (b) the annuity rate available when the member retires. There is no set formula, as in the case of defined benefit schemes, for determining benefits. These schemes are also called money purchase schemes

A clause whereby insurers define the meaning they intend to assign to various words and phrases in the policy. This is particularly important when the ordinary meaning of the word is not appropriate. The term ’employee’ is widely defined in public and employers’ liability policies with the intention of removing doubt that might otherwise cause disputes.