Glossary and Definitions

Defined benefit scheme. A scheme in which the benefits are defined in the scheme rules and accrue independently of the contributions payable and investment returns. Most commonly, the benefits are related to members' earnings when leaving the scheme or retiring, and the length of pensionable service. Also known as a “final salary” or “salary-related” scheme.

Defined contribution scheme. A scheme in which a member's benefits are determined by the value of the pension fund at retirement. The fund, in turn, is determined by the contributions paid into it by that member and by any investment returns. Also known as a “money purchase” scheme.

A member entitled to a deferred pension (sometimes known as “preserved benefits”).

A benefit relating to the past service of members of an occupational pension scheme who are no longer active members but have not yet retired. The benefits are payable at retirement or death, whichever occurs first.

The disclosure requirements define what information trustees are obliged to provide about a scheme and the benefits the scheme offers. Some of this information must be given in evidence automatically, and other aspects of it must be provided on request.