Glossary

  1. 85 year rule

    May only apply if you paid into the scheme before 1 October 2006. The rule is satisfied if your age at the date you draw your benefits and your membership add up to 85 years or more (part years are ignored). If you are part-time, your membership counts at its full calendar length. If you have deferred benefits the rule is satisfied if your age at the time you take your benefits and the membership you would have had if you had remained in the scheme, add up to 85 or more.

  2. Abatement

    The amount a scheme member's pension may be reduced when they re-commence employment.

  3. Accrual rate

    The rate pension benefits build up with each year of pensionable membership.

  4. Actuary

    Collects and analyses statistics and uses them to calculate risks and costs.

  5. Actuarial valuation

    A valuation of the pension fund carried out by an actuary. The main purpose is to monitor the assets of the fund against the liabilities of the pension benefits payable.

  6. Additional Voluntary Contributions

    Known as AVCs. These are extra payments to increase your benefits. You invest money through an AVC provider connected to the pension scheme. AVC payments are taken directly from your pay before tax is deducted therefore attracting tax relief.

  7. Adjudicator

    A person appointed by your employer and the Pension Section to consider applications from any person whose rights or liabilities are affected by a decision, act or omission. You can contact us to find out who your Adjudicator is.

  8. Administering Authority

    The LGPS is a national scheme administered at a local level by Administering Authorities. Kent County Council is the administering authority for the Kent Pension Fund and is responsible for administration and investment of member and employer contributions.

  9. Admission agreement

    An agreement an employer, who is an admission body, makes with Kent Pension Fund about which of their employees can be members of the Local Government Pension Scheme (LGPS).

  10. Admission body

    An employer that chooses to participate in the scheme under an admission agreement. These tend to be employers such as charities and contractors.

  11. Aggregate

    Joining your previous LGPS pension rights with the LGPS pension rights that you are building up in your current employment.

  12. Aggregated

    Joining your previous LGPS pension rights with the LGPS pension rights that you are building up in your current employment.

  13. Annuity

    A contract usually sold by an insurance company which makes payments to the holder, usually after retirement and guaranteed for life.

  14. Assumed pensionable pay

    Assumed Pensionable Pay (APP) is your average pensionable pay, calculated using the 3 months or 12 weeks pensionable pay before the date you received reduced or no pay.

  15. Beneficiary

    A person who has, or will have, an entitlement to benefits under the rules of the scheme, when certain events occur.

  16. Capital value

    An assessment of how much a person's annual pension and lump sum is worth. The Government and Actuaries create factors to be used to calculate the value. Generally the capital value for your pension is calculated by multiplying your annual pension by 20 and adding your lump sum. The calculation is different for pensions before 2006 and defined contribution schemes.

  17. CARE pensionable pay

    The amount you pay contributions on and the amount your benefits are based on.

  18. Career Average Revalued Earnings

    A Career Average Revalued Earnings (CARE) scheme means that the benefits you build up are worked out using your pay in each scheme year. The pension you build up each year is added together in your pension account. Inflation is added so it keeps its value.

  19. Cash Equivalent Value

    Also known as CEV. This is the cash value of your pension rights for the purpose of divorce or dissolution of a civil partnership.

  20. Civil partner

    Legal relationship registered by 2 people of the same or opposite sex and who are not related.

  21. Collective Defined Contribution

    A type of employee pension arrangement. It provides members an annual income at a fixed cost to the employer. The employee and employer pay in. The collective pot is shared between all members. This is instead of the member having an individual pot. It is an alternative arrangement to the traditional defined benefit and defined contribution.

  22. Commutation

    The conversion of part of your annual pension to provide a lump sum payment.

  23. Consumer Price Index

    Known as CPI. The average price increase or decrease of a basket of goods and services are collected from different retailing outlets and an overall percentage increase or decrease is calculated each month.

  24. Contracted out

    The scheme was contracted out of the State Earning Related Pension Scheme (SERPS) and the State Second Pension (S2P). This means that you paid reduced National Insurance contributions. The scheme guarantees to pay you a Guaranteed Minimum Pension (GMP) for being contracted out of SERPS. From April 2016 the Government removed the reduction in National Insurance contributions for all pension schemes.

  25. Contributions Equivalent Premium

    Known as CEP. An amount which represents the employer's liability for National Insurance contributions at the not contracted out rate in respect of a member who takes a refund of pension contributions. This includes the certified amount deducted from the employee and is paid to HMRC to ensure that the member's entitlement to State benefits is reinstated.

  26. Converted benefits

    You can give up some of your annual pension in your standard benefits to provide an extra tax-free lump sum. This is known as converted benefits. For every £1 of annual pension that you give up, you will receive an extra £12 lump sum. There are limits to how much you can convert.

  27. Cost of living

    The cost of maintaining a certain standard of living. Governments use different indexes, monitoring the price of goods and services, to measure the increase or decrease in the cost of living.

  28. Death grant

    An amount that may be payable in the event of your death.

  29. Deferred benefits

    Benefits that are held in the scheme until they become payable at a later date. You may have deferred benefits if you stop paying in to the scheme before retirement age.

  30. Deferred pension

    Your pension rights if you have left the scheme before the age at which your pension would be payable.

  31. Defined benefit scheme

    A pension scheme in which benefits are defined in legislation and based on earnings and a formula.

  32. Defined contribution scheme

    A pension scheme in which benefits depend on the amount of money paid in and investment returns.

  33. Dependant

    Someone who depends on you, financially, or because they are disabled.

  34. Designating body

    Bodies which can designate you for access to the Local Government Pension Scheme (LGPS). If you are employed by Town and Parish Councils, voluntary schools, foundation schools, foundation special schools, federated schools, Transport for London, among others, you can be designated for membership of the scheme.

  35. Discretion

    This is the power given by the Local Government Pension Scheme (LGPS) to enable your employer or Kent County Council Pension Section to choose how they will apply the scheme in respect of certain regulations. They are obliged to consider how to exercise their discretion and, in respect of some of these, to have a written policy. You may ask your employer or us what the policy is in relation to a discretion.

  36. Discretionary compensation

    Before 2006, local authorities were able to award discretionary compensation, in the form of additional years service in the scheme, to employees whose employment was terminated early on redundancy or efficiency grounds.

  37. Earmarking order

    If the Court makes an Earmarking Order, your pension still belongs to you, but some are earmarked for your ex-spouse or ex-civil partner. The earmarked benefits will be paid to your ex-spouse or ex-civil partner when your benefits are paid, reducing the amount paid to you.

  38. Efficiency

    Your employer can dismiss you on the grounds of business efficiency if they feel it is in your best interest to leave their employment. Early release of pension benefits are in line with redundancy regulations. No redundancy payment is payable.

  39. Financially interdependent

    Financially interdependent means you rely on the joint finances of yourself and your partner to support your standard of living. It does not mean that you both need to be contributing equally.

  40. Final salary pensionable pay

    The full-time, term-time equivalent pensionable pay during the final year of your employment, as defined under the Local Government Pension Scheme 2008 regulations, to calculate your benefits built up before 1 April 2014. It does not include non-contractual overtime or additional hours. If you work part-time, it is the pensionable pay you would have earned if you worked full-time, term-time.

  41. GAD

    Government Actuary's Department (GAD). GAD's responsibilities include setting the factors applied to Local Government Pension Scheme pension calculations

  42. Gainful employment

    Any paid employment (whether in local government or elsewhere) for not less than 30 hours each week for a period of not less than 12 months.

  43. Guaranteed Minimum Pension

    The scheme guarantees to pay you a pension that is at least as high as you would have earned had you not been contracted out of the State Earning Related Pension Scheme (SERPS). At State pension age the Department for Work and Pensions (DWP) will write to tell you of the amount of your GMP.

  44. Independent Financial Advisers

    Independent Financial Advisers (IFAs) are professionals who offer independent advice on financial matters and recommend financial products from the whole of the market. When making decisions about your pension you may wish to seek independent financial advice. A list of IFAs can be found on the Unbiased website.

  45. Independent Registered Medical Practitioner

    Known as IRMP. IRMP is an independent registered medical practitioner who is registered with the General Medical Council . They must hold a diploma in occupational health medicine (D Occ Med) or an equivalent qualification issued by a competent authority in an EEA state; and for the purposes of this definition, "competent authority" has the meaning given by section 55(1) of the Medical Act 1983 (74) ; or is an Associate, a Member or a Fellow of the Faculty of Occupational Medicine or an equivalent institution of an EEA state.

  46. Input period

    The Pension Input Period’ (PIP) is the period over which your pension growth is measured. PIPs for all pension schemes are aligned with the tax year – 6 April to 5 April.

  47. Internal Dispute Resolution Procedure

    Known as IDRP. The right of appeal process if you or a dependant is dissatisfied with a decision made by your employer or Kent County Council Pension Section.

  48. Letting authority

    The letting authority is the scheme employer that is letting the contract.

  49. Local Government Pension Scheme

    Known as LGPS. An occupational pension scheme open to eligible employees of local government organisations such as councils, fire civilian staff and non teaching employees in further and higher education establishments.

  50. Main section

    You pay full contributions in accordance with the contribution bandings and receive full pension benefits.

  51. Money purchase scheme

    Provides retirement benefits based upon the amount of money that is in your pension pot when benefits are due to be paid. The value of your benefits are determined by the amount of contributions that have been made, the period that each contribution has been invested, investment growth over this period and the level of charges.

  52. Mutuality of obligation

    Applies to casual employees. If your employer is not obliged to offer work and you are not obliged to accept work, you are considered as not having a mutuality of obligation. You are deemed to be employed only on the days you actually work and therefore unlikely to work 3 months consecutively. Employees with contracts of less than 3 months can opt in to the scheme.

  53. Normal pension age

    Known as NPA is the age at which you can retire and receive full benefits. The NPA for Local Government Pension Scheme current members is equal to your State Pension Age (SPA), minimum age 65. If you stopped paying into the scheme before 1 April 2014 your normal pension age is 65.

  54. Pension account

    The amount of pension you have built up is held in a pension account. You have a pension account for each employment in which you pay contributions as a current member.

  55. Pension credit

    Is a share of an ex-spouse's or ex-civil partner's pension benefits, as awarded by a court under a Pension Sharing Order following a divorce or a dissolution of a civil partnership.

  56. Pension debit

    Is the amount by which the value of your pension benefits are reduced under a Pension Sharing Order following a divorce or a dissolution of a civil partnership.

  57. Pension sharing order

    Through the court, a divorcing couple can choose to split a pension. This provides a spouse or civil partner with a share of a scheme member's retirement benefits. The Court issues a pension sharing order.

  58. Pensionable earnings

    Your PPS 2015 pension is calculated using your pensionable earnings. Your pensionable earnings include basic salary, London weighting, temporary promotion pay and temporary salary. Allowances are not pensionable. Your pensionable earnings are also used to assess the contribution rate you pay in each pay period.

  59. Pensionable pay

    The amount you pay contributions on and the amount your benefits are based on.

  60. Power of attorney

    If you find yourself in a situation where you need someone else to manage your financial affairs, you can arrange for a legal document to be drawn up called a Power of Attorney. This allows one person (the Donor) to give another person (the Attorney) the power to act on their behalf regarding their finances.

  61. Private sector

    A section of a national economy that is businesses controlled and owned by private individuals or group. They are not owned or operated by the government.

  62. Public sector

    A section of a national economy that is organisations controlled by the government.

  63. Public Sector Transfer Club

    The comparatively favourable terms under which service may be transferred from or to another public sector pension scheme which participates in the Public Sector Transfer Club.

  64. Qualifying service

    The service which is used to decide if you are eligible for benefits. The service is counted in calendar days.

  65. Relevant benefit crystallisation event

    When an individual becomes entitled to a relevant lump sum or a person is paid a relevant lump sum death benefit in respect of an individual. Also known as RBCE.

  66. Responsible Investment

    This refers to the incorporation of environmental, social and corporate governance considerations into investment processes, as these are absent in much traditional financial analysis. RI was very focused on company level analysis, but climate change and sustainability challenges increasingly require a more strategic, forward looking, portfolio view. There are 4 levers that an investor can use in its responsible investment approach: integration, stewardship, thematic investment and exclusions.

  67. Scheme year

    A scheme year runs from 1 April to 31 March.

  68. Shared Cost Additional Pension Contributions

    Known as SCAPCs. If you pay Additional Pension Contributions (APCs) your employer can contribute towards the cost.

  69. Spouse

    The person to whom you are legally married.

  70. Stakeholder pension scheme

    Personal pension plan which must meet requirements set out in government legislation. There is a cap on charges, low minimum contributions, and flexibility in stopping and starting contributions.

  71. Standard benefits

    The amount of annual pension and tax-free lump sum you are entitled to at retirement age. You can exchange some of your annual pension for an additional lump sum, this is known as converted benefits.

  72. State pension age

    This is the earliest age you can receive the State basic pension. Currently, the State pension age (SPA) is 65. Between December 2018 and October 2020 both will increase to 66.  Between 2026 and 2028 both will increase to 67 and to 68 between 2044 and 2046.

  73. State second pension

    Known as S2P. The State Second Pension (formerly known as SERPS) was the additional State pension, payable from State pension age by the Department for Work and Pensions (DWP). Scheme members were contracted out of S2P and most paid lower national insurance as a result.

  74. Tax relief

    Pension contributions are deducted from your earnings before tax is calculated. This means you pay less tax and is known as pension tax relief.

  75. Transfer value

    Is a cash sum representing the value of your pension rights.

  76. Triennial valuation

    Every 3 years the actuary carries out a valuation of the Kent Pension Fund. The main purpose is to monitor the assets of the Fund against the liabilities of the pension benefits payable. Your employers' contribution rate to be paid for the following 3 years is determined.

  77. Underpin

    If you were within 10 years of reaching age 65 in April 2012 your benefits are protected. You will receive a pension at least equal to that which you would have received under the Local Government Pension Scheme 2008 regulations.

  78. Variable time

    A scheme member who is paid fees or your pay is calculated on a sessional basis rather than by reference to hours worked, hourly rate or annual salary. This is not casual staff or those who work variable hours.

  79. Whole time

    This has the same meaning as full-time. You are normally employed for between 37 to 40 hours per week, depending on your full-time contract of employment.

  80. Working days

    Monday to Friday, except bank holidays.