Your A-Z glossary
Here is a list of terms commonly used in pensions. Select a letter group from the list to below to see their definitions.
They are listed in alphabetical order, from A-Z.
A-E
Active member
Typically, this means an employee who is currently paying in to, and building up, benefits in their employer's pension scheme. You can learn more about being an active member by selecting one of the links below:
Actuary
An actuary is an expert on pension scheme assets and liabilities, life expectancy and probabilities (the likelihood of things happening). They carry out regular valuations of pension schemes to see how they are performing and if they have enough funds and money being paid in (the assets) to cover the cost of paying benefits when they are due (the liabilities). This applies to defined benefit schemes such as the ESPS Final Salary and RBP.
Actuarial Valuation
The calculation of a scheme’s assets (incomings), liabilities (outgoings) and overall funding position at a given point in time. For DB schemes, this carried is out every three years.
Added Years
If you are a Final Salary member, Added Years are a way of buying extra membership in the Scheme to increase the length of your pensionable service and boost your pension benefits.
See the boosting your benefits page for more details.
Additional benefit level
For members in the Retirement Balance Plan (RBP), if your retirement balance is already being credited with the highest of the five core benefit levels (40% of your pensionable pay), you can choose to purchase an additional benefit level. This will increase your retirement balance and can be purchased in multiples of 5% of your pensionable pay.
See the boosting your benefits page for more information.
Additional contribution rate
For members in the Retirement Balance Plan (RBP), if you want to credit your retirement balance with more than 40% of your pensionable pay, you can consider paying additional contributions. The additional contribution rate you pay depends on the additional benefit level that you choose to build up each Plan year and your age on 1 April in the Plan year. The additional contribution rates can be found in your Member Guide. They have been calculated by the actuary to reflect the full cost of providing the additional benefits.
If you are an active RBP member, you can find out more about additional contributions on the boosting your benefits page.
Additional Voluntary Contributions (AVCs)
If you are an active Final Salary member, AVCs are extra contributions you can pay in to your pension, on top of the regular contributions you and your employer pay in. The aim is to boost your savings. You choose where to invest your AVCs from a range of funds, and the money you pay in gets tax relief in the same way as your normal pension contributions. This is subject to certain tax limits. You can find out more about additional contributions for active Final Salary members on the boosting your benefits page.
Alternative investments
This covers a very broad and varied range of investments. They are called alternative investments because they are not traditional investments such as equities, bonds and cash. They could, for example, include investments in commodities (such as oil, gas, raw materials) and infrastructure (such as toll roads).
Annual Allowance (AA)
This is the maximum amount of pension benefit you can build up or save into all of your pension arrangements each tax year before tax is charged on any excess.
A lower 'Tapered Annual Allowance' applies to high-earning pension earners. See also the Tapered Annual Allowance definition.
A lower allowance may also apply if you have taken money out of a defined contribution pension. This is known as the 'Money Purchase Annual Allowance'.
You may be able to carry forward unused allowances from previous years.
Learn more about tax on the dedicated tax allowances page, as well as on the government website.
Annual Benefit Statement (ABS)
Your Annual Benefit Statement (ABS) shows you the current value of your pension, what you may be entitled to when you take your benefits, and the information used to calculate it. You can use your ABS to think about whether your retirement planning is on track.
Annuity
An annuity is a guaranteed regular income that you can buy when you retire, using the money in your pension. Annuities may be purchased for life or for a fixed period. Members often choose to purchase an annuity by means of an insurance policy once they retire, although you are no longer obliged to. This option is typically used more by DC pension scheme members, such as the UPP. For more details on your retirement options, please see the pages linked below.
Back service credit
A period of service in the Scheme for Final Salary members, which is retrospectively applied to your benefits. This is sometimes applied if you transfer benefits from another pension arrangement into the Scheme.
Benchmark
A measure against which the investment performance of a fund may be judged.
Beneficiary
A person, or organisation, who will receive some benefits from your pension when you die. Depending on the scheme rules, this may include a pension, lump sum, or other benefits.
Please check the relevant death benefits page for more information.
Benefits
A general term for monies paid from a pension scheme. This may include lump sums, pension payments and death benefits. You can find out more about your benefits on the relevant pages linked below.
Bonds
These are loans to companies or governments. Loans to the UK government are called gilts. Their prices depend on current and future interest rates and the financial strength of the companies or governments to which the loans have been made.
Cash
In investment terms, cash means investment in a range of short-term financial products offered by banks and financial institutions. As these products generate varying returns, cash funds do not offer or set a particular rate of interest.
Civil partner
A person who has entered into a civil partnership with their partner.
Contributions
The money paid into your pension, or pension pot, by you and your employer.
Core benefit level
For Retirement Balance Plan (RBP) members, this is the percentage of your pensionable pay that you choose to credit to your retirement balance each Plan year. There are currently five core benefit levels: 20%, 25%, 30%, 35% and 40% of your pensionable pay.
See also the additional benefit level definition.
Core contribution rate
For Retirement Balance Plan (RBP) members, this is the amount of your pensionable pay you contribute to your pension to achieve your required benefit level.
The core contribution rate you pay from the start of the Plan year depends on your age on 1 April in that year. This contribution rate remains fixed until the start of the next Plan year.
The older you get, the more valuable your RBP benefits become. To reflect this, your core contribution rates increase as you get older.
You can find a full breakdown of the contribution rates and benefit levels in your Member Guide.
See also the definition for core benefit level.
Default retirement age
For UPP members, this is the age at which you would usually take your benefits, and is typically 65 years old.
Deferred member
A person who is no longer building up benefits in their employer’s pension scheme but has benefits in it that they have not yet claimed.
Discover more about being a deferred member by selecting the relevant link below:
Defined Benefit (DB) scheme
In a DB scheme, the amount you get at retirement is based on many things. These could include your earnings and how long you have been a member of the scheme, as defined in the scheme rules. When you retire, you can take some of your pension as a tax-free cash lump sum. The rest you can get as a regular income, which may be taxed.
The Final Salary section of the Uniper Group of the ESPS and Retirement Balance Plan (RBP) are DB arrangements. You can find more information in the relevant areas of this website:
Defined Contribution (DC) scheme
In DC schemes, the amount of contributions paid by the member and employer is set, but the amount of income received on retirement is not and depends on investment performance. DC schemes are also known as money purchase schemes.
The Uniper Pension Plan (UPP) is a DC arrangement.
Visit the UPP area for more information.
Dependant
Your dependants are typically those who are financially reliant on you and will usually include your spouse or civil partner.
For Retirement Balance Plan (RBP) members, this can also include any other adult that the Trustees agree can be a dependant. You can nominate a dependant for the Trustees to consider
HMRC impose strict criteria on the dependants that benefits can be paid to.
Early retirement
Taking the benefits from your pension scheme before you reach your Normal Pension Age or Normal Retirement Date. Check your Member Guide or the pages on your retirement options for more details.
- Active Final Salary members - taking your benefits
- Deferred Final Salary members - taking your benefits
Expression of wish
If a lump sum death benefit is payable, the Trustees (or for UPP the pension administrator) decides who it should go to. An Expression of Wish gives you the chance to tell them who you would prefer the lump sum to be paid to. They do not have to follow this but will take it into account. You can find out more on the Expression of Wish pages linked below.
ESPS
Stands for the Electricity Supply Pension Scheme.
F-J
Final pensionable salary
This term applies to Final Salary members. Normally, final pensionable salary is your pensionable salary (or what would have been your pensionable salary had you not been absent due to sickness and/or injury) in the 12 months before retirement, death or leaving the Company. When you take your benefits, an element of inflation protection may be built into the calculation of your final pensionable salary.
Final salary
A final salary pension, also known as a defined benefit (DB) pension is one where you get a secure income, usually for life, once you start taking your benefits. The amount you get is usually based on how many years you have been a member of the scheme and the salary you have earned when you leave or retire.
See also defined benefit schemes (above) and check the Final Salary area of this website for more details.
Financial Adviser
Sometimes referred to as an Independent Financial Adviser (IFA), this is someone authorised by the Financial Conduct Authority (see below) to provide financial advice. They may charge a fee for this advice. You can find out more on the help and advice page.
Financial Conduct Authority (FCA)
The FCA is the organisation responsible for regulating advice on financial matters including pensions, and for registering firms and individuals.
General Data Protection Regulation (GDPR)
GDPR is a data protection law, which governs the collection, storage, processing and transfer of personal data. It was passed by the European Union and introduced across Europe on 25 May 2018.
The Data Protection Act (DPA) 2018 is the UK’s implementation of the GDPR. It controls how your personal information is used by organisations, businesses or the government in the UK.
Following BREXIT the GDPR is retained in domestic law as the UK GDPR, but the UK has the independence to keep the framework under review. The ‘UK GDPR’ sits alongside an amended version of the DPA 2018. It covers both ESPS and UPP members.
You can find out more about data protection at www.gov.uk/data-protection.
HMRC
HM Revenue and Customs (HMRC) is the UK’s tax, payments and customs authority. You can find out more at www.gov.uk/government/organisations/hm-revenue-customs.
Ill-health retirement
This is when a member is awarded their pension before reaching their normal pension age or normal retirement date, due to sickness, disability, or other medical condition. Check the changing circumstances pages below to find out more.
Income tax relief
Income tax relief reduces the amount of income tax you owe to the government.
You can find out more on the tax allowances page.
Internal Disputes Resolution Procedure (IDRP)
The procedure for handling any complaints about the Uniper Group of the ESPS.
If you are a member of the Final Salary or RBP categories and would like a copy of the IDRP or wish to make a complaint, you need to contact the Secretary to the Trustees. You can find their information on the contact details page.
K-O
Late retirement
You may be able to postpone taking your benefits up to the maximum age of 75. Check your Member Guide or the pages on your retirement options for more details.
- Active Final Salary members - taking your benefits
- Deferred Final Salary members - taking your benefits
- Active RBP members - taking your retirement balance
- Deferred RBP members - taking your retirement balance
- Active UPP members - taking your pension account
- Deferred UPP members - taking your pension account
Lifetime Allowance (LTA)
The LTA was the maximum amount of tax efficient savings you could make into all your pensions throughout your working life. It was abolished from 6 April 2024 and new lump sum allowances have been introduced. You can read more about these on the tax allowances page.
Lump sum
A cash payment from a pension, usually at retirement. This may be tax-free up to a certain limit. You can find out more on the tax allowances page.
Member
A person who, having joined a pension scheme, has built up benefits under that scheme.
Money purchase pension
This is another term for a defined contribution (DC) scheme.
National Insurance contributions
These are payments made by employees, employers and the self-employed in the UK to fund various state benefits.
Normal minimum pension age (NMPA)
The normal minimum pension age (NMPA) is the earliest age most people can access their workplace or personal pensions without incurring a significant tax charge. However, people may be able access their pension benefits earlier due to ill-health or if they have a “protected pension age.” Please check your Member Guide for more information.
The NMPA is set by the government. It is currently 55 years old. The NMPA will increase to 57 on 6 April 2028.
The NMPA is different from the state pension age (SPA). Please see the definition of SPA for more details.
Normal pension age (NPA)
For Final Salary members, this is the age from which you can retire without any reductions to your benefits. This is defined in the Scheme rules. Please check your Member Guide or the pages on your retirement options for more details.
Normal retirement date (NRD)
For Retirement Balance Plan (RBP) members this is the age from which you can retire without any reductions to your benefits. This is defined in the RBP rules. Please check your Member Guide or the pages on your retirement options for more details.
Money Purchase Annual Allowance (MPAA)
The Money Purchase Annual Allowance only comes into effect if you have already taken some of your defined contribution savings as cash or a short-term annuity from a flexi-access drawdown fund, cash from a pension pot (‘uncrystallised funds pension lump sums’) or if you have taken more than the limit from a capped drawdown fund. It is the total amount you can pay into any defined contribution pension arrangements (such as the UPP or AVCs) each tax year before tax will be charged, and is significantly lower than the standard Annual Allowance (AA).
See the tax allowances page for more details.
Overseas Transfer Allowance (OTA)
This applies to transfers out to a Qualifying Recognised Overseas Pension Scheme (QROPS).
If the transfer value exceeds the OTA, an overseas transfer charge (OTC) will apply.
More information can be found at www.moneyhelper.org.uk/en/pensions-and-retirement/building-your-retirement-pot/moving-your-uk-pension-overseas.
P-T
Pension
A savings plan, designed to provide an income in retirement.
Pension account
If you are a UPP member you will have an individual pension account set up in your name by your pension administrator, Fidelity.
Pension administrator
The company that runs the operational aspects of the scheme and carries out certain legal duties - for example, the administrator calculates and pays out benefits and pays certain tax charges to HMRC. For the Uniper Group of the ESPS, including Final Salary and RBP, the administrator is Broadstone; for UPP it is Fidelity.
Pension increase
When you start taking your pension, the amount you receive may increase every year to keep up with inflation. The way these increases are calculated is defined in the Scheme rules, or if you purchased a pension outside of the Scheme, according to the terms agreed when you retired. Find out more on the dedicated pension increase pages.
Pension Input Amount (PIA)
For the Final Salary sections of the ESPS this is how much the value of your Final Salary pension (including any added years) has increased during the Pension Input Period. If you make Additional Voluntary Contributions these contributions also need to be included in your PIA.
For RBP members this is how much your retirement balance account (including any Additional Voluntary Contributions) has increased during the Pension Input Period.
For UPP members, your PIA is the amount contributed to the Uniper Pension Plan during the Pension Input Period.
For all members, your PIA is measured against the Annual Allowance (AA). When calculating your PIA for Annual Allowance purposes, you mustinclude the PIA for all of your pension arrangements. This includes the bonus waiver if you have participated. Please see the relevant bonus waiver page linked below for more details.
See also the definitions on Annual Allowance (AA) and Pension Input Period (PIP).
Pension Input Period (PIP)
A period of time over which a member’s contributions to (or benefits built up in) a pension are measured against the Annual Allowance (AA). This is aligned with the tax year.
See also Annual Allowance (AA) and Pension Input Amount (PIA).
Pensionable pay
For Retirement Balance Plan (RBP) members, this is your basic annual salary plus any regular payments that the Company tell you is part of your pensionable pay.
Pensionable salary
For Final Salary members, this is the part of your salary that counts towards your pension and defines the amount you pay into it. It does not usually include overtime or bonuses.
For UPP members, this is your basic annual salary, plus any regular payments specified by the Company as being part of your pensionable pay.
Pensionable service
For Final Salary members, this is the period of time (service) you have been a member of the Scheme. This will be the date you joined the Scheme up to the date you leave or take your benefits . It also includes any benefits that may have been transferred in from previous arrangements and any added years contracts you have purchased.
Personal pension
A personal pension is a registered pension scheme that is independent of your employer.
Plan year
For Retirement Balance Plan (RBP) members, the Plan year runs from 1 April to 31 March.
Property
In investment terms, property involves investing either directly in commercial property (like office blocks and shopping centres) or in the shares of property companies. Investment returns reflect either rental income and the value of the property held or the value of any shares held in property companies.
Protected pension
The part of your pension which has rights and benefits from a given point in time “protected”. This means they cannot be changed to anything less favourable. This applies to some Final Salary members. More information can be found in your Member Guide.
Qualifying Recognised Overseas Pension Scheme (QROPS)
An overseas pension scheme can only receive a UK tax-free transfer from a registered pension scheme, if it is deemed by the government to be a qualifying recognised overseas pension scheme (QROPS).
See also Overseas Transfers Allowance (OTA).
Registered Pension Scheme
A registered pension scheme is one that has been registered with HMRC and enjoys a number of tax privileges. These include the ability to take part of the benefits as a tax-free cash sum and receive tax relief on contributions.
Retail Prices Index
The Retail Prices Index (RPI) is a list of the prices of typical goods which shows how much the cost-of-living changes from one month to the next.
Retirement
The period of time after you stop working.
Retirement balance
For Retirement Balance Plan (RBP) members, this is the value of benefits in the account that the Trustees set up in your name when you joined the RBP. Over time your retirement balance will increase – through the benefit levels that you choose each year and the inflation-linked increase that your balance receives at the start of each Plan year.
Retirement Balance Plan (RBP)
The Retirement Balance Plan, also known as RBP, is a defined benefit pension arrangement offered by Uniper.
Salary sacrifice
This is an arrangement between you and your employer, where you agree not to receive a certain element of pay and your employer instead pays this amount directly into your pension. Both you and your employer potentially save on National Insurance contributions with such an arrangement (as well as you not paying income tax on the amount).
Self-Assessment
Self-Assessment is a system HM Revenue and Customs (HMRC) uses to collect taxes.
Tax is usually deducted automatically from wages and pensions. However, people and businesses with other income or benefits must report it themselves, via a Self-Assessment tax return.
You can find out more at www.gov.uk/self-assessment-tax-returns.
Shares
Shares give you part ownership of a listed company. Their prices reflect how well investors feel that companies are doing and are expected to do. Equities is another term used for shares.
State Pension
The pension paid to UK citizens by the government when they reach State Pension Age.
State Pension Age
The age you start to receive your State Pension benefits. You can find out your State Pension Age using the calculator on the government website.
Summary Funding Statement
This is a report which is produced for those in the Final Salary categories or RBP, and tells you the financial position of the Scheme at the time of its actuarial valuation or annual funding update. It also provides the main reasons for any changes in funding position and, if the Scheme is in deficit, it shows the agreed recovery plan. This does not apply for members of the UPP as your benefits are simply the value in your pension pot.
Tapered Annual Allowance (TAA)
Your Annual Allowance may be reduced, or tapered, if you are a high earner. You can learn more about tax on the dedicated tax allowances page, as well as on the government website.
The Company
This refers to Uniper UK Limited or your employer within the Uniper Group.
The Group
This refers to the Uniper Group of the ESPS, which is also sometimes referenced as the Scheme.
Trustee
A trustee is a person or company, acting separately from the employer, who holds assets in the trust for the beneficiaries of a pension scheme. Trustees are responsible for ensuring that the pension scheme is run properly and that members’ benefits are secure. You can find out more on the Group Trustees page.
U-Z
Uncrystallised Funds Pension Lump Sum (UFPLS)
A UFPLS is one of the ways you can take your benefits from a defined contribution (DC) pension arrangement. It means a direct withdrawal from your pension pot. Unlike with some other options, such as a drawdown or annuity, you do not take a separate 25% tax-free lump sum. Instead, 25% of your UFPLS will be tax-free and the rest will be taxed as income .
The UPP (see below) is a defined contribution (DC) arrangement. You can find out more on the taking your benefits page for UPP members.
UPP
'UPP' stands for the Uniper Pension Plan (UPP) and is an arrangement run by Fidelity. More information can be found in the UPP area of this website.