Glossary

A

Accrued Benefits

The pension and other benefits that you have earned for your service up to a given date. The pension is expressed as the amount payable at your normal retirement date.

Back to top

Actuarial Assumptions

Agreed assumptions used by the scheme actuary.

 

Back to top

Actuarial Valuation

The valuation process by which our appointed actuary estimates (based on the actuarial assumptions) how much money the Plan needs today to pay pensions that have been built up to date. The valuation is normally undertaken every three years.

Back to top

Actuary

The trustee has appointed an actuary to advise them on issues including funding, scheme design and the management of risk. One of our actuary's key responsibilities is to carry out the actuarial valuation.

Back to top

Additional Pension

See State Second Pension (S2P).

Back to top

Additional Voluntary Contributions (AVCs)

Contributions above the normal rate that Plan members chose to pay in order to build up extra benefits. These funds are held with either Standard Life or BlackRock.

Back to top

Annual Allowance (AA)

The maximum amount of pensions savings that a UK taxpayer may accrue in each tax year without giving rise to an additional tax charge. See here for details

Back to top

Annuity

A series of regular payments, usually made for the duration of the recipient's life. Additional Voluntary Contribution (AVC) funds can be used to purchase annuities.

Back to top

Annuity Rate

The rate at which a fund is converted into an annuity. Rates change regularly with market conditions.

Back to top

Auditor

The person appointed by the trustee to review and verify the financial statements of the scheme.

Back to top

B

Basic State Pension

A regular payment received from the government if you have paid or been credited with National Insurance contributions.
More information can be obtained from the Pension Service website.

Back to top

Benefit Crystallisation Event (BCE)

An event that triggers a test of a member's benefits against the lifetime allowance. (e.g. first starting to draw a pension).

Back to top

BlackRock

One of two Additional Voluntary Contribution (AVC) Investment Management companies appointed by the Trustee to manage the AVCs of Plan members.

Back to top

C

Cash Commutation

Surrendering of part of a pension  in exchange for a tax-free lump sum (this can only be taken at the time the pension is first put into payment).

Back to top

Cash Equivalent Transfer Value (CETV)

The value of a deferred pensioner's benefits in one scheme, that the member may wish to transfer to another registered pension scheme.
On certain occasions, the Courts may order that part of a CETV be transferred to another pension arrangement in order to provide benefits for a former spouse or civil partner following divorce proceedings. Such a requirement may also apply to pensioner members.

Back to top

Company

Telent Limited (previously known as the General Electric Company plc and Marconi Corporation plc).

Back to top

Contracted Out

If an Employer is contracted out, members pay lower National Insurance contributions. However, certain benefits must continue to be paid by the Company Pension Scheme
The GEC Plan is not contracted out and therefore this term is not relevant.

Back to top

Corporate Trustee

A company (as opposed to individuals) which acts as trustee of a pension scheme.

Back to top

Credited Interest

Interest credited monthly on your contributions at a rate determined by the Trustee, by reference to the rate of return on the assets of the Plan, but not less than 2.5% per annum.

Back to top

D

Deferred Pensioner

A member who has ceased pensionable service and who has not yet started to receive a pension from the scheme.

Back to top

Defined Benefit Scheme

A pension scheme which provides benefits based on a formula. Benefits are typically calculated by reference to the member's near-final earnings and length of pensionable service. The GEC Plan is a defined benefit scheme.

Back to top

Defined Contribution Scheme

A pension scheme in which member/employer contributions are at a set rate (usually expressed as a percentage of earnings). Benefits depend on investment returns and annuity rates in force at the time benefits are paid.

Back to top

Department for Work and Pensions (DWP)

The Government department which includes the Pension Service. More information can be obtained from the DWP website.

Back to top

Dependant

In relation to a member, a spouse, ancestor or descendant (however remote); a spouse of such an ancestor or descendant; a brother, sister, uncle or aunt (whether of whole or half blood) and a spouse or descendant of such a person; the same relatives of a spouse; an individual entitled to any interest in the member's estate under his will; and an individual towards whose maintenance or support the member has contributed.

Back to top

E

Early Retirement Factor (ERF)

Where members wish to take Early Retirement, their pensions at normal retirement age will be reduced to allow for the longer period that their pensions are expected to be paid. Reduction rates are determined by the Trustee after consulting with the actuary.

Back to top

Employer Nominated Director (END)

A director of a corporate trustee who has been nominated by the sponsoring employer. In The GEC Plan, SPT's ENDs are nominated and appointed bytelent Limited.

Back to top

Employers

The Company and those of its subsidiary and associated companies which, with the consent of the Company, participate in the Plan.

Back to top

Equivalent Pension Benefit (EPB)

A small pension provided within a company scheme, where employment was contracted out of the former State Graduated Pension Scheme. Some members of the GEC Plan have these entitlements.

Back to top

F

Final Pensionable Earnings

The three highest consecutive pensionable earnings figures in the ten years before you ceased to be a contributory member of the Plan.

Back to top

Front End Loading (FEL)

Where Plan members take their pension prior to State Pension Age, they have an option to take more of their Plan Pension earlier, with a reduced Plan Pension once their State pension comes into payment.

Back to top

G

General Index of Retail Prices (RPI)

A prices index published monthly by the Government. In The GEC Plan, the minimum annual pension increase is based on RPI and is capped at 5%.

Back to top

H

HM Revenue and Customs (HMRC)

HMRC was formed in April 2005, following the merger of the Inland Revenue and HM Customs and Excise departments. HMRC governs the tax regime applicable to registered pension schemes.

Back to top

I

Internal Dispute Resolution Procedure (IDRP)

Occupational pensions schemes are required by law to have such a procedure in place, to deal with disputes between members (or other specified individuals) and trustees. Click here to view The GEC Plan's IDRP in the Plan Guide.

Back to top

J

K

L

Lifetime Allowance (LTA)

The maximum value of benefits that can be paid from all registered pension schemes to which a member has belonged, without giving rise to an additional tax charge.  See here for details

Back to top

Limited Price Indexation (LPI)

For the GEC 1972 Plan, RPI capped at 5%.

Back to top

M

Member Nominated Director (MND)

A director of a corporate trustee who has been nominated by member representatives in accordance with statutory guidelines. In The GEC Plan, SPT's MNDs are elected via the PCC and appointed by telent Limited.

Back to top

Minimum Pension Age

The minimum age under law at which a scheme member may receive benefits. This is age 50 for retirements on or before 5 April 2010 and age 55 for retirements thereafter. No minimum age applies in the case of early retirement due to ill health.

Back to top

N

National Association of Pension Funds (NAPF)

The NAPF describes itself as the leading UK body providing representation and other services for those involved in the Pensions Industry.

Back to top

O

Open Market Option

The facility whereby  members can use the fund arising from a defined contribution scheme to purchase an annuity with any insurance company of their choice. In The GEC Plan, this option is available to most members who have Additional Voluntary Contributions (AVCs).

Back to top

P

Pension Consultative Committee (PCC)

A committee elected by GEC Plan members to represent the views of all members (deferred pensioners and pensioners) as to matters affecting their interests. Three MND's are nominated by the PCC for appointment to the Board of SPT.

Back to top

Pension Protection Fund (PPF)

A fund from which payments are made to eligible members in prescribed circumstances in the event that a defined benefit scheme has insufficient assets to cover PPF compensation levels.

Back to top

Pension Sharing Order

A Court order resulting in the splitting of pension rights following divorce.

Back to top

Pension Tracing Service

This is operated by the Pension Service and may be able to help find an old pension. The service will try to match the information given with one of the schemes on their database and inform the enquirer of the name and address of the scheme administrator.

Back to top

Pensionable Earnings

Your earnings in a complete Plan year.

Back to top

Pensionable Service

Your length of service with the employers, while a contributing member of the Plan. Pensionable service is calculated in complete years and months.

Back to top

Pensioner

A member of a scheme who is currently drawing a pension.

Back to top

Pensions Ombudsman (PO)

The Pensions Ombudsman is empowered to investigate and determine any complaint or dispute of fact or law concerning a scheme.

Back to top

Phased Retirement

The facility for a members of The GEC Plan to continue in employment whilst receiving payment of their accrued pensions. This facility is subject to approval of the company.

Back to top

Plan Year

Any 12 months beginning on 6 April and ending on the next 5 April.

Back to top

Q

Qualifying Recognised Overseas Pension Scheme (QROPS)

An overseas pension scheme to which a CETV may be paid from a registered UK scheme. A list of QROPS which have consented to have their details published is available on the HMRC website.

Back to top

R

S

Specified Dependant

In relation to a member or pensioner who dies without leaving a surviving spouse, a person nominated by him before attaining 65 and before his pension commences, who was financially dependent on him at the time of nomination and remained so at his death, and who was accepted as such by the Trustee.  

Back to top

Standard Life

One of two Additional Voluntary Contribution (AVC) Investment Management companies appointed by the Trustee to manage the AVCs of Plan members.

Back to top

Stanhope Pension Trust Limited (SPT)

The corporate trustee of The GEC Plan.

Back to top

State Earnings Related Pension Scheme (renamed State Second Pension in 2002)

The State earnings-related pension scheme. This provides a pension related to the band of earnings between the State lower and upper earnings limits covering employment since April 1978. The pension is up to 25% of averaged band earnings for those who have participated fully in SERPS and reach State Pension Age on or before April 1999. Thereafter SERPS provides a pension reducing to 20% of averaged band earnings for those reaching State pension age on or after April 2010. Band earnings are revalued in line with a wages index each year. The State lower earnings limit for this purpose is approximately equal to the basic Social Security pension and the upper limit is about seven times that pension.

Back to top

State Graduated Pension Scheme

An earnings related State pension scheme which ran from April 1961 to April 1975.

Back to top

State Pension Age (SPA)

The earliest age from which a State retirement pension may be paid. Refer to the Pension Service website for more information.

Back to top

State Second Pension (S2P)

Formerly known as SERPS, the additional State Pension (or S2P) came into effect from 6 April 2002. More information can be obtained from the Pension Service website.

Back to top

Statement of Investment Principles (SIP)

A statement of the principles governing investment decisions, which our trustee is required by law to produce. Copies are available upon request to Scheme members, and certain groups or individuals as specified in the legislation.

Back to top

Statutory Money Purchase Illustration (SMPI)

Statements of the value of prospective pensions in today's terms. They are issued by both Standard Life and BlackRock to those Deferred members of the GEC Plan who have Additional Voluntary Contributions (AVCs).

Back to top

Surviving Spouse

In relation to a pensioner, the person who was the pensioner’s only spouse when the pension began or when age 65 was attained (whichever was earlier), and remained the only spouse at the pensioner’s death.
In relation to a deferred pensioner, the person who was the deferred pensioner’s only spouse when pension age was reached, and remained the only spouse at the deferred pensioner’s death.
n.b. An unmarried member may nominate a specified dependant before commencement of pension or at age 65 (whichever is earlier).

Back to top

T

The Pensions Advisory Service (TPAS)

TPAS is available to assist members and beneficiaries of a pension scheme in connection with difficulties which they have been unable to resolve with the trustee.

Back to top

The Pensions Regulator (TPR)

TPR is the UK regulator of work-based pension schemes. It works with pension scheme trustees, scheme managers and employers to help protect employee pensions. If problems do develop, TPR has powers to put matters right.

Back to top

Trivial Commutation Lump Sum

A lump sum that may be paid to an individual in lieu of their entire pension. This is available in certain circumstances to members over age 60 where the total value of rights from all registered pension schemes is less than 1% of the lifetime allowance. Refer to the HMRC website for more information.

Back to top

Trust Deed and Rules

A legal document, which sets out the powers of the trustee and the rules governing the operation of a pension scheme.

Back to top

Trustee

The trustee of the Plan is Stanhope Pension Trust Limited. Its directors include Independent Directors who are selected from a register compiled by The Pensions Regulator, Employer Directors who are nominated by telent and nominees of the Pension Consultative Committee which is elected to represent all members of the Plan.

Back to top

U

V

W

X

Y

Z