The 50/50 section allows members to pay half the contributions and build up half the pension.
The rate at which pension builds up for each year of membership e.g. 1/49th pensionable pay.
A style of investment management where the manager seeks to add value to the fund by actively buying and selling shares.
Current member of the Scheme who is building up pension in their present job.
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.
An actuary works out whether enough money is being paid into a pension scheme to pay the pensions when they are due.
Extra pension contributions paid to increase pension, cover pension ‘lost’ due to unauthorised unpaid leave, or to cover pension ‘lost’ due to industrial action.
Extra voluntary contributions made by a member to increase the pension benefits available on retirement. These contributions are paid to an insurance company.
The decision as to which mix of assets to buy – shares, bonds, property or cash.
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.
The process where employers must automatically enrol workers that meet specified eligibility conditions into a qualifying pension scheme.
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.
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.
A statement showing a member the pension they have earned in the Scheme to the last 31 March.
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.
For a cohabiting partner to receive a survivor’s pension on your death, the following criteria must all be met:
- You must be able to marry or form a civil partnership with your partner
- You and your partner are living together as if you are a married couple or as if you are civil partners
- Neither you or your partner is living with a third person as if you are a married couple or as if you are civil partners
- Either your partner is financially dependent on you or you are both financially interdependent. This means that you rely on your joint income to support your standard of living – even if you do not contribute equally.
The first condition must apply at the date of your death. The 2nd, 3rd and 4th conditions must have applied for a continuous period of at least two years before the date you died.
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.
The money paid by a member and/or his/her employer into a pension fund.
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.
The nominal interest a bond will pay at each payment date.
A pension or one-off payment made to a member’s dependants if the member dies.
Pension benefits calculated when a member leaves the Scheme and payable at a later date.
A member who is no longer paying into the Scheme but will get pension benefits when they reach their normal pension age.
A pension scheme which states in advance the level of pension benefits that will be paid on retirement, usually based on membership and earnings.
Someone who is dependent on a member of the pension Scheme (or on a pensioner of the Scheme).
Eligible children are your children. They must, at the date of your death be:
- your natural child (who must be born within 12 months of your death), or
- your adopted child, or
- your step-child or a child accepted by you as a member of your family (this doesn’t include a child you sponsor for charity) and be dependent on you.
Eligible children must be:
- under age 18, or
- aged between 18 and 22
(inclusive) and in full-time education or vocational training, or
- unable to engage in gainful employment because of physical or mental impairment and either has not reached the age of 23 or the impairment is, in the opinion of NILGOSC’s Independent Registered Medical Practitioner, likely to be permanent and the child was dependent on you at the date of your death because of mental or physical impairment.
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.
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.
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.
A professional manager of investments often employed by a pension scheme to manage assets on their behalf.
Bonds issued by the Government.
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.
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.
A type of bond where the interest payment is guaranteed to rise in line with the Retail Prices Index.
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.
The general rate of increase in prices and wages over a period of time.
Normal Pension Age (NPA) is the same as a member’s State Pension Age for benefits built up from April 2015.
A pension scheme set up by an employer to provide pension benefits to its employees on their retirement.
This is when an employee chooses to leave membership of a pension scheme.
A style of investment management where no active management is required, instead investments are made in line with an index.
A regular income paid to an individual on their retirement.
This is the total of your salary, wages and payments on which pension contributions are based. It is also used to calculate your pension for membership after 31 March 2015. It includes your basic pay, overtime (contractual and non-contractual), additional hours, shift allowance, bonus, acting up allowance, maternity pay, paternity pay, adoption pay, shared parental pay and any other taxable benefit specified in your contract as being pensionable. It does not include travelling or subsistence allowance, pay in lieu of holidays, payment as an inducement not to terminate employment, payment to buy out an existing term or condition of employment, compensation for the purposes of achieving equal pay in relation to other employees, any amount treated as the money value for the provision of a motor vehicle, any pay paid by your employer if you go on reserve forces service leave or any non-consolidated non-pensionable payment paid to you as part of an annual pay award.
The period of employment that is used to calculate a member’s pension benefits.
In April each year NILGOSC increases pensions to reflect rises in the cost of living.
The qualifying period in the Scheme is two years. A member meets the two year qualifying period if:
- they have been a member of the Scheme for two years, or
- they have transferred in pension rights from a different occupational pension scheme or from a European pensions institution and the length of service they had in that scheme or institution was two or more years or, when added to the period of time they have been a member of the Scheme is two or more years, or
- they have brought a transfer of pension rights into the Scheme from a pension scheme or arrangement in which they were not allowed to receive a refund of contributions, or they have previously transferred pension rights out of the Scheme to a pension scheme abroad (i.e. to a qualifying recognised overseas pension scheme), or
- they already hold a deferred benefit or are receiving a pension from the Scheme (other than a survivor's pension or pension credit member's pension), or
- they have paid National Insurance contributions while a member of the Scheme and cease to contribute to the Scheme in the tax year of reaching pension age, or they cease to contribute to the Scheme at age 75, or
- they die in service.
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.
The Rule of 85 refers to a provision of the Scheme which allowed members who retired early to take their pension entitlements without penalty if the sum of their age and length of membership equalled 85 years or more. This rule was abolished on 1st October 2006 however members who joined before this have some protections:
- All existing members at 30 September 2006 are protected until 31 March 2008 i.e. the benefits you accrue up to 31 March 2008 will be protected under the 85 year rule.
- Those existing members at 30 September 2006 who will be 60 or over and meet the 85 year rule by 31 March 2016 are fully protected i.e. the benefits you accrue up to 31 March 2016 will be protected under the 85 year rule.
Those existing members at 30 September 2006 who will be 60 or over and meet the 85 year rule between 1 April 2016 and 31 March 2020 will have full 85 year rule protection to 31 March 2008 and have some 85 year rule protection, on a sliding scale, to 31 March 2020.
A general name for shares, stocks and bonds issued to investors.
Sold by companies looking to raise money. Shares give the holders an interest in the company and a right to share in the profits.
This is the earliest age people can receive their State Pension.
The process of selecting which individual shares and bonds to buy and sell.
Contributions made to a pension scheme, particularly in the public sector.
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).
These are protections that apply to members who are close to retirement to ensure that they receive a pension at least equal to that which they would have received had the Scheme not changed on 1 April 2015. The underpin also applies to protected pension benefits transferred into the Scheme after 1 April 2015.
Those members who are protected by the underpin have to meet all the criteria below:
- were active members on 31 March 2012, and
- were within 10 years of their Normal Pension Age on 1 April 2012,
- were active members immediately before the underpin date and receive payment of benefits on or after the underpin date,
- have not had a disqualifying break in service of more than 5 years, and
- have not drawn any benefits before the underpin date.
The underpin date is the date a member reaches age 65, or the date of death in service or the date they left the Scheme with an immediate entitlement to pension (including flexible and voluntary early retirement).