Glossary

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  • 5
  • 50/50 Section

    The 50/50 section allows members to pay half the contributions and build up half the pension. 

  • a
  • Accrual rate

    The rate at which pension builds up for each year of membership e.g. 1/49th pensionable pay.

  • Active Management

    A style of investment management where the manager seeks to add value to the fund by actively buying and selling shares.

  • Active Member

    Current member of the Scheme who is building up pension in their present job.

  • Actuarial Valuation

    An assessment carried out by an actuary, usually every three years, to determine how much money needs to be put into the pension scheme so that it can meet future pension payments.

  • Actuary

    An actuary works out whether enough money is being paid into a pension scheme to pay the pensions when they are due.

  • Additional Pension Contributions (APCs)

    Extra pension contributions paid to increase pension, cover pension ‘lost’ due to unauthorised unpaid leave, or to cover pension ‘lost’ due to industrial action.

  • Additional Voluntary Contributions (AVC’s)

    Extra voluntary contributions made by a member to increase the pension benefits available on retirement.  These contributions are paid to an insurance company.

  • Asset Allocation

    The decision as to which mix of assets to buy – shares, bonds, property or cash.

  • Assumed Pensionable Pay

    Assumed Pensionable Pay is the estimated pay that is used if a member is no longer receiving full pay due to sickness, injury, relevant child related leave or reserve forces service leave. 

  • Automatic Enrolment

    The process where employers must automatically enrol workers that meet specified eligibility conditions into a qualifying pension scheme. 

  • b
  • Balanced Management

    A traditional approach to investment where a manager buys a combination of shares and bonds to provide both income and capital appreciation while avoiding excessive risk.

  • Benchmark

    A standard against which investment performance is measured. A common benchmark is the FTSE All-Share Index which includes a large percentage of all quoted shares.

  • Benefit Statement

    A statement showing a member the pension they have earned in the Scheme to the last 31 March.

  • c
  • Career Average Revalued Earnings (CARE)

    A defined benefit scheme in which pension benefits are based on a career average pay and length of membership in the Scheme and revalued to retirement.

  • Cohabiting Partner

    Cohabiting partners must meet certain criteria to be eligible for a survivor’s pension.  These criteria are set out in the Death Benefits sections.

  • Consumer Price Index

    An index published by the Government each month and it is a measure of inflation in the UK.  It is used as a basis for pensions increases and revaluing pensions.

  • Contributions

    The money paid by a member and/or his/her employer into a pension fund.

  • Corporate Bonds

    Loan stock issued by companies which offer a fixed rate of interest paid over the duration of the loan, together with repayment on maturity at a predetermined rate.

  • Coupon

    The nominal interest a bond will pay at each payment date.

  • d
  • Death Benefit

    A pension or one-off payment made to a member’s dependants if the member dies.

  • Deferred Benefits

    Pension benefits calculated when a member leaves the Scheme and payable at a later date.

  • Deferred Member

    A member who is no longer paying into the Scheme but will get pension benefits when they reach their normal pension age.

  • Defined Benefit Scheme

    A pension scheme which states in advance the level of pension benefits that will be paid on retirement, usually based on membership and earnings.

  • Dependant

    Someone who is dependent on a member of the pension Scheme (or on a pensioner of the Scheme).

  • e
  • Eligible Child

    Children must meet certain criteria to be eligible for a child’s pension.  These criteria are set out in the Death Benefits sections.

  • Expression Of Wish

    An Expression of Wish enables a member to tell NILGOSC who they would like to receive any death grant and any relevant AVC death benefits.

  • f
  • Final Pensionable Pay

    The pensionable pay used to work out benefits built up before 1 April 2015.  It is usually the last 12 months pay or the best pay in the last three years.

  • Final Salary Scheme

    A type of defined benefit scheme where the pension benefits paid on retirement are based on how much an individual is earning when they retire.

  • Fund Manager

    A professional manager of investments often employed by a pension scheme to manage assets on their behalf.

  • g
  • Gilts

    Bonds issued by the Government.

  • i
  • Ill−health early retirement

    When a member retires early because of ill−health.  They may get enhanced pension benefits if they meet the qualifying criteria for ill-heath retirement.

  • Index

    In the stock market, an index is a device that measures changes in the prices of a basket of shares, and represents the changes using a single figure. The purpose is to give investors an easy way to see the general direction of Shares in the index.

  • Index Linked Gilts

    A type of bond where the interest payment is guaranteed to rise in line with the Retail Prices Index.

  • Index Tracking Fund

    Investments are made to match closely the performance of a market index such as the FTSE All-Share Index. It does not aim to outperform the market like active management does.

  • Inflation

    The general rate of increase in prices and wages over a period of time. 

  • n
  • Normal Pension Age

    Normal Pension Age (NPA) is the same as a member’s State Pension Age for benefits built up from April 2015.

  • o
  • Occupational Pension Scheme

    A pension scheme set up by an employer to provide pension benefits to its employees on their retirement.

  • Opting Out

    This is when an employee chooses to leave membership of a pension scheme.

  • p
  • Passive Management

    A style of investment management where no active management is required, instead investments are made in line with an index.

  • Pension

    A regular income paid to an individual on their retirement.

  • Pensionable pay

    This is the pay on which pension contributions are paid.  It includes basic pay, overtime, additional hours etc.  A full definition of pensionable pay is available on the Calculating benefits page.

  • Pensionable Service

    The period of employment that is used to calculate a member’s pension benefits.

  • Pensions Increase

    In April each year NILGOSC increases pensions to reflect rises in the cost of living.

  • q
  • Qualifying Period

    This is a two year period that you need to be paying into the Scheme in order to qualify for a pension when you retire.  A definition is set out on the Qualifying Period page.

  • r
  • Retail Prices Index

    An index published by the Government each month reporting the change in the price of a ‘basket of goods, commodities and services’ and is the accepted measure of inflation within the UK.  This is a slightly different ‘basket of goods, commodities and services’ from those used to calculate CPI.

  • Rule of 85

    The Rule of 85 gives some early retirement protections for members who meet the criteria and were contributing to the Scheme before 1 October 2006.  More information on the Rule of 85 is available at Members > Retiring > Early Retirement > Rule of 85.

  • s
  • Securities

    A general name for shares, stocks and bonds issued to investors.

  • Shares

    Sold by companies looking to raise money. Shares give the holders an interest in the company and a right to share in the profits.

  • State pensionable age

    This is the earliest age people can receive their State Pension. 

  • Stock Selection

    The process of selecting which individual shares and bonds to buy and sell.

  • Superannuation

    Contributions made to a pension scheme, particularly in the public sector.

  • t
  • Transfer Value

    The value of an individual's pension rights, which can be transferred to another pension scheme to provide alternative benefits if they have left the Local Government Pension Scheme (NI).

  • u
  • Underpin

    The underpin protection applies to members who were age 55 or over on 31 March 2012 and remained in the Scheme after 1 April 2015.  It ensured that when these protected members took their pension the pension payable under the career average scheme (CARE) and the final salary schemes are compared and the higher pension paid.  The underpin is currently being reviewed. More information is  available on the McCloud court case pages.