Pension Terms You Must Know

This is a person who receives, or is entitled to, an annuity.

This is a fixed amount of money paid each year until a particular event (such as a death). It might be split into more than one payment, for example monthly payments.

Annuity Rate
This compares the size of an annuity (how much it pays each year) with how much it cost to buy. It also takes into account the age of the annuitant.

Accumulation Period
This is the period when you pay premiums to accumulate funds for retirement.

Deferred Annuity
This is an annuity which will start to pay out at some time in the future.

A person who is financially dependent on a member or pensioner, or was so at the time of death or retirement of the member or pensioner.

Immediate Annuity
An annuity which commences immediately, or shortly after, it is purchased.

The naming by a member of a person or persons to whom he or she wishes any death benefit to be paid.

Participating Plans
These plans give a share of the insurer’s profit to policy holders. This share is not fixed and depends on the financial performance of the company.

Pension Plan
An arrangement, other than accident insurance, to provide pension and/or other benefits for members on leaving service or retirement and for the member’s dependants in the event of death.

Sum Assured
The amount that the nominee receives in the event of death of the insured during the accumulation period.

Surrender Charges
Charges levied by the insurer if you end the policy before the date of vesting.

Vesting Age
The age at which you choose to start receiving pension.