A means by which an individual can make pension provision. This may be either collective or individual and with or without the involvement (by means of contributions or otherwise) from the individual’s employer. Technically, the term is used to refer to a personal pension scheme or a free standing additional voluntary contributions scheme that has been approved by the Inland Revenue. The term company pension scheme is often used to describe occupational pension schemes.

Rules that set out how the accounts of an occupational pension scheme must be calculated and written.

Many of its regulations were brought into force in 1997, covering aspects of occupational and personal pension schemes.

A part of Opra, PSR lists the occupational schemes covered by Opra and helps members trace schemes with which they have lost touch. It also enables Opra to check that every scheme has paid its levy.

Enables divorcing couples to share their pensions following a court order at the time of the divorce. The arrangement will reduce the value of the member’s pension rights by a specified percentage (the pension debit) and an equivalent amount pension credit will be transferred to the ex-spouse. Pension sharing does not apply to the basic state pension, unmarried couples or to separated couples.

Splitting of pension benefits between a divorced couple means ‘a clean break’ instead of remaining financially linked until retirement age as happens with earmarking. The ex-spouse is entitled to a pension credit that remains in the member’s current scheme or is transferred to a separate pension arrangement; most pension schemes insist upon the latter. The split means each can decide, within IR limits, when to take their pensions. but the ex-spouse is subject to the member’s chosen retirement date. The original term pension splitting now called pension sharing.

Transfer of the cash value from one approved pension scheme to another. A transfer payment is made to the member’s receiving scheme.

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.

Definitions are by scheme rules. In a final salary scheme it is not necessarily the salary in the last year of service. See PENSIONABLE EARNINGS.