Pilkington Superannuation Scheme
The following definitions are for commonly used pension terms.
Actuarial Valuation
An investigation by an actuary to assess how well a pension fund is able to meet its past and future liabilities in terms of pensions, death benefits and other benefits.
Actuary
An adviser using mortality statistics and potential investment returns to work out what benefits the fund must pay out in the future and how much needs to be paid in now to meet those future liabilities.
Annual Report
The means by which the Trustee communicates financial and other information about the Scheme to members and other interested parties.
Band Earnings
Are the earnings between the Lower Earnings Limit (LEL) and the Upper Earnings
Limit (UEL) for National Insurance Contributions. There is currently a rebate of 1.6% of band earnings for a member of a contracted-out salary scheme.
Basic State Pension
The basic or "old age" pension is a flat rate benefit paid by the State to individuals who reach State Pension Age and have paid sufficient National Insurance Contributions during their working life.
Beneficiary
This is an individual who is entitled to benefits under the Scheme, now or in the future. That includes active members, deferred members, pensioners and their dependants.
Contracted-out
This means the Scheme is "contracted-out" of the State Earnings Related Pension
Scheme (SERPS) and both the Company and the member pay reduced rates of National Insurance Contributions. Members give up benefits under SERPS and receive broadly equivalent benefits under the Scheme instead.
Deed
The Deed is a legal document on which the Scheme is based.
Lower Earnings Limit (LEL)
The LEL is used to calculate band earnings. For the 2001/2002 tax year, the LEL is
£3,744.
National Insurance Contributions
A form of taxation levied on earnings. This is 10% on band earnings. (8.4% for members in pension schemes contracted-out of SERPS.)
Occupational Pension Scheme
A scheme organized by an employer to provide pensions and / or other benefits for an employee on leaving service, on death or retirement.
Pension Fund
The assets of a pension scheme.
Rules
The Scheme Rules are the detailed provisions of the Scheme, brought into operation by the Deed.
Reference Scheme
From 6 April 1997, a contracted-out scheme has to provide pensions, which are broadly equivalent to (or better than) pensions under a hypothetical Reference Scheme.
State Earnings Related Pension Scheme (SERPS)
This is the second tier of the State pension which is salary related. Set up in 1978, the pension originally was 25% of band earnings for an individual's best 20 years. The long term pension target was changed to 20% of band earnings, averaged over an individual's entire working life, from 1988/1989. This reduction is being phased in for people reaching state pension age before 2009/2010. The Government has announced its intention to replace SERPS with the 'Second Pension', which will operate on a different basis.
Statement of Investment Principles
A written statement of the principles governing decisions about investment for the
Scheme, which the Trustee is required to prepare and maintain.
Scheme
This is the term used for the Pilkington Superannuation Scheme.
Trustee(s)
They are the legal owners of the fund and are obliged to look after the assets on behalf of the beneficiaries. Trustees can be drawn from the management team and from scheme members.
Trustee Report
This is a report by the Trustee describing various aspects of the Scheme. It may form a part of the Annual Report.
Upper Earnings Level (UEL)
The UEL is used to calculate band earnings. For the 2001/2002 tax year, the UEL is
£29,900.