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Retirement Glossary - Investment Glossary


 

Active Member

Is a person who, subject to any restriction by temporary absence, maternity leave or trade dispute, has been admitted to membership of the Trust and is in pensionable service.

 

Annual Allowance

Is the amount of contributions that can be made to your Personal Account each year and still receive tax relief. This includes contributions to any other registered pension schemes. The annual allowance does  not apply in your last year before death or ill health retirement.

 

Annuity

Is the pension payable for life, which you may buy when you retire, using the value of your Personal Account. It is an insurance policy that makes a series of payments at stated intervals, which may be subject to increases. The amount of pension received will be determined by the annuity rate in force at the time of retirement i.e. the cost of buying the annuity.

 

Civil Partner

Means a person who is the registered civil partner, under the Civil Partnership Act 2004, of a member.

 

Deferred Member

A person who has been admitted to membership of the Trust and is not in pensionable service.

 

Dependant

Means a person who is financially dependent upon the member.

 

Employer

Is defined in your Trust Benefit Summary.

 

My Account

Your secure on-line interactive pension planning system which provides you with access to your Personal Account details.

 

Normal Retirement Age

Is defined in your Trust Benefit Summary.

 

Pensionable Salary

Is defined in your Trust Benefit Summary.

 

Pensionable Service

Means your service with your employer whilst an active member of the Trust, up until normal retirement age, death or earlier date of leaving. There is also the option to continue pensionable service past normal retirement age.

 

Personal Account

Is the fund that you build up containing your contributions, the employer’s contributions, any pension benefits you may transfer in from a previous pension arrangement and investment returns.

 

State Pension Scheme

Is the pension you receive from the government when you reach State Pension Age. You will earn pension benefits under the State Pension Scheme in addition to the pension you will earn under the Trust.

 

Target Retirement Age

This target retirement age will be used to determine the date at which you start your benefit alignment phase if you elect to invest in a lifestyle strategy.

 

Trust

Means the employer’s section of the National Pension Trust. The Trust is legally constituted by the Trust Deed and Rules. It is administered by the Trustees. The Trust is a registered pension scheme under the Finance Act 2004. The Trust and its assets are kept entirely separate from the employer’s assets.

 

Trust Benefit Summary

The document which sets out details relating to your Trust eligibility and the contributions that will be paid by you and the employer on your behalf to the Trust.

 

Trust Guide

The document which sets out details of the benefits of the Trust and how it is managed on your behalf by the Trustees.

 

Trust Deed and Rules

Is the governing document that sets out the specifications of the Trust. If there is any discrepancy between this Trust Guide and the Trust Deed and Rules, the latter will override.

 

Trustees

The Trustees are responsible for the day to day running of the Trust in accordance with the Trust Deed and Rules, including responsibility for  making sure that the agreed contributions are paid into the Trust and the ongoing stewardship in respect of the money held in the Trust.

 

Trust investment guide

The document which sets out details relating to the investment options available to you via the Trust. Its objective is to provide you with sufficient information to help you make an informed decision on how to invest your Personal Account.

 

Trust Retirement Guide

The document which sets out details relaying to how you may access your benefits from the Trust.

 

Trust Sponsor

This is Xafinity PT Limited.

 

Trust Year

Is the 6th April to the 5th April.

 

 

 

Investment Glossary - Retirement Glossary


 

Active Member

Is defined in your Trust Guide.

 

Alternative Assets

These are asset classes which are generally regarded as alternative to ‘mainstream’ assets such as equities and bonds. Although not exhaustive, they may include the following asset classes:


Asset Class

  • Commodities examples include energy, metals and agriculture.
  • Emerging Market Debt Bonds issued by the governments of developing countries (e.g. Asia, Latin America).
  • Emerging Market Equity Company shares listed on the stock markets of developing countries.
  • Global High Yield Bonds issued by companies and other organisations that have a lower credit rating.
  • Hedge Funds which can use aggressive strategies in order to achieve an absolute positive return in any given market cycle.
  • Private Equity Shares in companies that are not listed on a recognised exchange.

 

Annual Management Charge

This is an amount charged to cover the cost of managing your Personal Account. The charge is a percentage of the value of the fund.

 

Annuity

Is the pension payable for life, which you may buy when you retire, using the value of your Personal Account. It is an insurance policy that makes a series of payments at stated intervals, which may be subject to increases. The amount of pension you receive will be determined by the annuity rate available when you retire i.e. the cost of buying the annuity.

 

Asset Allocation

The proportion of your Personal Account invested in alternative assets, equities, property, bonds, gilts and cash.

 

Benchmark

This is a standard which can be used for performance comparison. For example, the FTSE All Share Index may be used as a benchmark against which the performance of major UK companies listed on the UK stock exchange may be compared.

 

Bonds

A bond is a type of loan made to a company, known as a corporate bond. When you buy a corporate bond you are basically lending your money to a company. There is an agreed date (maturity date) by which the company must repay the loan at its face value, plus a pre-determined rate of interest. Capital gains or losses are made when bonds are traded, or on default on any day before the agreed maturity date. They are sometimes viewed as a little less secure than gilts because there is more potential for a company to default on its payment, but they are usually expected to offer higher returns than gilts.

 

Capital Growth (loss)

This is the growth (loss), in value of the original sum invested.

 

Currency

Any investment outside of the UK will be influenced by the difference in exchange rate between sterling and the country where the investment has taken place. Any relative movements in these exchange rates, sometimes known as currency fluctuations, will give rise to an increase in volatility of these investments.

 

Equities

Represent shares in the ownership of a company.

 

Gilts

These are loans made to the UK Government. When you buy gilts, you are lending your money to the Government. For fixed interest gilts the Government will pay a fixed rate of interest until maturity and then repay the face value at maturity. For index linked gilts the principle is the same but the interest and maturity payments are increased by inflation. Capital gains or losses are made when gilts are traded on any given day prior to the agreed maturity date of the gilts.

 

Income

This is the dividend or interest that is paid on the investment.

 

Index

Typically used as a benchmark to compare the performance of your investments. For example, the FTSE is the leading provider of stock market indices in the UK. The FTSE 100 Index tracks the market value of the top 100 UK companies listed on the UK stock exchange.

 

Lifestyle Strategies

This is an investment strategy which tries to manage some of the risks for you. Its aim is to try to make sure that you are invested in the right type of fund at the right time. Lifestyle strategies automatically adjust your asset allocation (both existing investments and new contributions) over the period leading up to your target retirement age.

 

My Account

Your secure on-line interactive pension planning system which provides you with access to your Personal Account details.

 

Personal Account

Is the fund that you build up containing your contributions, your employer’s contributions, any pension benefits you may transfer in from a previous pension arrangement and investment returns.

 

Property

Property is what is known as a ‘real’ asset class with some link to the real economy. Investment is generally in commercial property, such as retail parks, shops, offices and industrial units spread around the UK. There will be little, if any, exposure to residential property.

 

Return

This is the total growth accruing from an investment and is made up of capital growth and income.

 

Self Select

With self select funds, you have the ability to determine your own asset allocation e.g. equities, bonds, gilts, property or cash to help implement any specific investment requirements you may have.

 

Target Retirement Age

This target retirement age will be used to determine the date at which you start your benefit alignment phase if you elect to invest in a lifestyle strategy.

 

Trustees

The Trustees are responsible for the day to day running of the Trust in accordance with the Trust Deed and Rules, the ongoing stewardship in respect of the money held in the Trust.

 

Trust

The Trust is legally constituted by the Trust Deed and Rules. It is administered by the Trustee. The Trust is a registered pension scheme under the Finance Act 2004. The Trust and its assets are kept entirely separate from the employer’s assets.

 

Trust Guide

The document which sets out details of the benefits of the Trust and how it is managed on your behalf by the Trustee.

 

Trust Investment Guide

The document which sets out details relating to the investment options available to you via the Trust.  Its objective is to provide you with sufficient information to help you make an informed decision as to how to invest your Personal Account.