Minimum benefit set in a pension scheme. It means that a member, whose actual pension falls below the minimum, will receive the minimum amount.

Contributions payable to an appropriate personal pension scheme or to a FSAVC scheme by the DWP in respect of a member who has contracted out. The contributions are the flat rate rebate plus the age-related rebate of national insurance contributions and basic rate tax relief on the employer’s share of the rebate where paid into a personal pension plan. The term also describes any minimum amount that a member must contribute in order to be a member of an occupational or personal pension scheme, or in order to make additional voluntary contributions.

MFR is intended to provide security for members of defined benefit schemes in the event of their employer becoming insolvent and making further contributions to the scheme. Schemes must hold a minimum level of assets to meet its liabilities and set out a time scale within which any underfunding must be addressed. An MFR valuation must be conducted by the scheme actuary at least every third year. Following the Pensions Bill (February 2004) MFR will be replaced in 2005 by scheme-specific funding requirements allowing schemes greater flexibility in developing funding strategies appropriate to their circumstances. The Bill also introduces the concept of full buyout that will affect solvent employers who wind up their defined benefit schemes.

Minimum reserves required by an insurance company. An insurer’s required minimum margin of solvency must not fall below the MGF. MGF for general business is €2 million (or €3 million for motor, aviation, general liability, credit and suretyship). This is reduced by 25 per cent for mutual associations. The MGF for life insurance undertakings is €3 million but is reduced by 25 per cent for mutual associations. The new levels of MGF under Directive 2002/12/EC do not apply to mutuals with less than €5 million of annual contribution income. The FSA calls for a short-term plan if the MGF rule (rule 2.9) is breached. The new MGF levels are index linked in line with inflation. See MARGIN OF SOLVENCY.

Tops up the income of pensioners receiving less than the minimum income by pension credits.

Minimum amount an employer is allowed to contribute to a contracted out money purchase pension scheme. The amount contributed secures protected rights for the members. It consists of a flat rate rebate of national insurance contributions and corresponds to the reduction in NI contributions that applies in respect of employees who are contracted out.

Nominal reserved against a claim that has been reported to an insurer but without sufficient information to enable the insurer to make a reasonable assessment of the potential liability. See IBNER. amount

the solvency margin which an insurance company is required by regulatory legislation to maintain; failure to maintain the required margin leads to intervention by the regulators and possibly to a ban on taking on new business

The compulsory purchase of residual syndicate capacity by a member, or group of members, holding 90 per cent or more of the syndicate capacity after a mandatory offer. See MAJOR SYNDICATE TRANSACTION.