GLOSSARY

Glossary of terms about changes to your workplace pension plan.

GLOSSARY OF TERMS

TERM DEFINITION

Accidental Death Benefit (ADB)

An amount that may be paid out if you die during a prescribed period from injury caused solely and directly by accidental, external, violent and visible means. Please refer to the Accidental Death Benefit (ADB) Endorsement for further details.

Advice Charges If you receive advice and related services from a financial adviser, you can ask for the costs to be paid from your pension plan as advice charges.
Allocation of Units/Buying Units The percentage of each regular, single and/or transfer payment we receive which is used to buy units in your plan. This is normally 100%. To make things simpler, we no longer refer to ‘allocation percentage’.
Allocation Percentage(s)

The percentage of each regular, single and/or transfer payment we receive which is used to buy units in your plan. This is normally 100%. To make things simpler, we no longer refer to ‘allocation percentage’.

Arrangement(s)/Account(s) To provide flexibility, your plan may have been set up with up to 1,000 smaller parts, known as ‘arrangements’. As we can now provide the same flexibility under a single arrangement, we’ll no longer refer to arrangements in your updated Terms & Conditions. Instead, we’ll refer to a ‘savings account’. If you later choose to take a flexible income, we’ll also set up a separate ‘income account’ for that.
Cancelling Units/Selling Units These have the same meaning and may be used interchangeably. This is when we reduce the number of units held in your plan.
Costs and Charges

Amounts deducted for managing and investing your plan. They reduce the value of your plan and are broken down into different elements.

  • Annual Management Charges (AMCs) – the cost of managing each investment fund, deducted daily through the calculation of unit prices.
  • Fund Expenses (FEs) – any additional costs linked to operating each investment fund, for example: legal, auditor and custodian costs, deducted daily through the calculation of unit prices.
  • Fund Based Charge (FBC) – the cost of operating your plan, calculated daily and deducted each month by selling units from your plan.

The sum of these costs and charges will equal your plan’s Total Annual Fund Charge (TAFC).

These replace the costs and charges (including the addition of any bonus units) described in your previous policy provisions.

The FBC and AMCs may change in future. FEs will vary over time, and don't include transaction costs and taxes which can be incurred when buying and selling investments.

Flexible Income/Flexible Access Drawdown

These terms have the same meaning and may be used interchangeably.

One of the options available to you when you decide to take your pension benefits. It can allow you to keep your pension savings invested while withdrawing a flexible income from your plan.

Fund Range

This is a list of funds in which you can choose to invest the value of your pension plan. Different funds invest in different underlying assets, have different aims and objectives, different costs and charges, and different levels and types of risk.

Group Personal Pension (GPP) This is the type of pension scheme your employer has set up for your pension plan.
Group Stakeholder Pension (GSHP) This is the type of pension scheme your employer has set up for your pension plan.
Investment Strategy/Lifestyle Strategy

In the context of your T&Cs, we use these terms interchangeably.

This is a type of investment option which changes how your plan is invested as you get closer to your selected retirement age. Over time, your plan investments will be gradually adjusted, and will move into lower risk funds. Although this reduces the growth potential of your plan, it also aims to help protect its value as you near your selected retirement age.

Lifestyle Target Date Where a pension plan invests in a lifestyle/investment strategy, it will be targeted to end on a certain date. This could be the date of reaching your selected retirement age (SRA) or a different date called a lifestyle target date (LTD). If your plan currently has a different LTD from SRA, we’re changing your plan’s SRA to match the LTD. We’ll then remove the LTD, as it will no longer be needed. This change won’t affect the lifestyle strategy.
Payments/Contributions ‘Payments’ and ‘contributions’ have the same meaning for money going into your pension plan from both yourself and your employer. There are different types of payments/contributions – regular, single or transfers. In the past, we’ve referred to these as ‘contributions’, but within your updated Terms & Conditions, we’re now referring to ‘payments’.
Plan/Policy ‘Plan’ has the same meaning as ‘policy’ and these terms may be used interchangeably. Within your updated Terms & Conditions, to make things simpler, we’re now referring to ‘Plan’ only.
Plan Holder/Member

A person who has a plan with us. We’ll use ‘plan holder’ rather than ‘member’ in future.

Policy Provisions/Terms & Conditions (T&Cs) The Terms & Conditions that govern your pension plan were previously referred to as Policy Provisions. We’ll now refer to them as Terms & Conditions (T&Cs).
Protected Rights

Prior to April 2012, customers could choose to contract-out of the additional state pension scheme. In return, the Government made payments each year to their pension plan. Plan benefits built up from these payments were referred to as ‘protected rights’ and had to meet certain Government rules when paid out. The Government abolished protected rights in 2012, meaning these benefits are now treated in the same way as all other plan benefits. Therefore, we’ll no longer refer to protected rights in your updated Terms and Conditions.

Selected Retirement Age /Selected Retirement Pension Date You can normally start taking benefits from your plan from the normal minimum pension age set by the Government, currently age 55. Your selected pension date (SPD) or the date you reach your selected retirement age (SRA) is when you or your employer have told us that you intend to start taking your pension benefits. You can change your SPD/SRA and can choose to start taking benefits at some other point, but now no later than age 99. Both SPD and SRA are the same thing, we’ve previously used SPD but we’re now only referring to SRA.
Unit Adjustment

As part of the changes we’re making to your plan and its Terms & Conditions, your plan will invest in a new unit series going forward.

Charges for the new unit series are deducted differently than for the current unit series, and so the new unit series will have different unit prices. To ensure your plan value is unaffected by the change of unit series, we’ll replace the units your plan currently holds with the appropriate number of units in the new series. We refer to this as a unit adjustment.

While the unit adjustment will mean a change to the number of units held by your plan, the value of your plan will be unaffected.

Unit Series

Your plan currently invests in one version of our fund range. As part of the changes we’re making to the charges of your plan, we’re creating a new version of the fund range. This new version has lower Annual Management Charges (AMCs) and different unit prices for each fund. We refer to each fund version as a ‘unit series’. Your plan will be invested in the new unit series going forward.

The fund aims and objectives, risks, underlying investments and how they are managed are the same for each unit series of a fund.

Unitised With Profits This is an investment fund which may have been available to your plan previously. It invests in a mix of assets such as company shares, property, bonds and cash deposits, and provides some potentially valuable guarantees. This fund is no longer available for you to invest in.