Jargon buster

In this section you will find some useful terms and their definitions

Account

Holds investments bought with the contributions made by you and TSB.

Active member

A person who is employed by TSB and a member of the Scheme.

Additional contributions

Any contributions you make over and above the core contributions. This includes transfers to your account from other pension arrangements and single one-off payments.

Annual Allowance (AA)

The annual limit on the amount of contributions you can pay into registered pension schemes that receive tax relief. The current AA is £40,000. From 6 April 2016 this will reduce for individuals with an adjusted income over £150,000 a year (including the value of your pension contributions). The allowance will reduce by £1 for every £2 of income over the £150,000 limit, reducing to a minimum AA of £10,000 for individuals with income of £210,000 or more.

Auto-enrolment (AE)

Auto-enrolment is legislation introduced by the government to encourage people to save for their retirement. Eligible workers are automatically enrolled into a ‘qualifying scheme’.

Basic pay

Your basic weekly or monthly pay before tax and National Insurance.

Basic State Pension

The pension available from State Pension Age to everyone who has made or been credited with sufficient National Insurance contributions during their working life.

Company contributions

The payments made into your account from TSB, depending on the core contribution rate you choose.

Core contributions

Payments deducted automatically from your basic pay and made to your account. If you participate in SmartSaver, contributions will be paid on your behalf. You can choose a core contribution rate of 3%, 4% or 5% of your basic pay.

Deferred member

A person who has left the Scheme but is not yet receiving a pension.

Drawdown

Allows you to transfer the value of your account out of the Scheme to an external personal pension plan, from which you draw money out instead of buying a regular pension. You can choose any age after age 55.

Eligible employee

Auto-enrolment requires all employers to enrol eligible employees into a qualifying scheme. For the purpose of auto-enrolment, TSB defines an eligible employee as anyone who:

  • is employed by TSB,
  • ordinarily works in the UK,
  • is aged between 22 and State Pension Age,
  • earns more than £10,000 (2014/15 tax year) a year including bonus, overtime etc; and
  • is not currently in the TSB Pension Scheme or has previously opted out.

Flexible retirement

You can choose to take your pension and continue working for TSB, provided TSB agrees. You can also continue to make contributions to the Scheme at any time up to your 65th birthday and TSB will make contributions too. This is known as flexible retirement.

Lifetime Allowance (LTA)

The total amount of pension savings you can build up in your lifetime without paying an additional tax charge. The LTA is £1million from 6 April 2016.

Normal retirement age

Age 65 unless a different age is specified in your employment contract. You will require the consent of TSB if you would like to retire earlier or later than this.

Partial incapacity

An injury or physical or mental impairment which in TSB's opinion:

  • prevents you from carrying on your normal occupation, with any employer (within TSB or otherwise);
  • seriously impairs your earnings capacity; and
  • is expected to be permanent.

Pension

The term that people typically use when they describe an annuity, which is an income you buy with the value of your account at retirement. The amount of income you receive in exchange for the value of your account will vary depending on a number of factors including the size of your account, your age, your health and the type of annuity you choose. You can choose a level (flat) pension or a pension that increases in payment. In the latter case, however, the pension that you start with will be a lower amount than if you had chosen a level pension.

Pension Input Period (PIP)

From 2015 onwards, the PIP will be the period 6 April to 5 April each year. However, the PIP for the first year of the Scheme differs from subsequent years and depends on whether or not you participate in SmartSaver for contributions in April 2014:

  • If you are a SmartSaver member, the PIP for the first year of the Scheme runs from the period 1 May 2014 to 5 April 2015.
  • If you are not a SmartSaver member, the PIP for the first year of the Scheme runs from the period 17 April 2014 to 5 April 2015.

Pensionable service

The length of time you have been a contributing member of the Scheme.

Qualifying dependant

Under current policy, this includes:

  • Spouse or civil partner – please note the benefit will not normally be paid to your spouse or civil partner if you are not living with them at the time of your death.
  • Cohabitee – provided that he/she was dependent (including interdependent) on you at the time of your death. A cohabitee is a person with whom you are living at the time of your death in a relationship which the Trustee considers to be similar to marriage or civil partnership.
  • Child – under age 18 (or 23 if in full-time education).
  • Child – regardless of age, dependent on you due to physical or mental impairment.

TSB may vary its policy from time to time.

Qualifying scheme

Under auto-enrolment legislation a ‘qualifying scheme’ is one which meets or exceeds the government’s standards for retirement provision. For example, defined contribution schemes, like the Scheme, have to meet minimum contribution levels.

Spouse

Your legal spouse or registered civil partner.

State Pension age

The age at which you will receive your State Pension. Depending on your date of birth, this is:

  • between age 65 and 68 if you are a man; and
  • between age 60 and 68 if you are a woman.

Target retirement age

The age at which you would like to take your benefits. You can choose any age after 55.

Total incapacity

An injury or physical or mental impairment which in TSB's opinion:

  • prevents you from carrying on any gainful employment, with any employer (whether with TSB or otherwise); and
  • is expected to be permanent.

Trustee

The body responsible for running the TSB Pension Scheme.

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