Glossary
Understanding your retirement benefits can sometimes be difficult. Throughout this site we have tried to make things as simple as we can, but there are terms which you might want to refer to again in the future. So we’ve created this glossary to summarise these key terms in case you need them.
Last Updated:
21/6/2016
Additional Voluntary Contributions (AVCs)
AVC
Contributions over and above a member’s normal contributions to the Plan.
Annual Allowance (AA)
The maximum amount of tax-privileged savings that you can build up in one or more registered schemes (such as workplace pensions and personal pensions) in a single tax year. Contributions paid or benefits built up in excess of this amount will give rise to a tax charge on the pension scheme member.
Annual Management Charge
This is the charge that you pay for investing in a fund. The AMC is expressed as an annual percentage but is deducted daily before the unit price is calculated.
Annuity
(sometimes called a 'pension')
This is where you buy a taxable retirement income for life from an insurance company. Options include annual increases and dependant’s pension payable on death.
Assets
A type of investment which, for the purpose of our Plan, has been divided into five classes namely cash, bonds, equities, diversified and specialist.
Automatic enrolment
A process whereby employers must automatically enrol employees who meet specified eligibility conditions into a qualifying pension scheme. These employees have the option to opt-out.
Benchmark
Normally an index (see definition) against which a fund’s performance is compared.
Cash sum on retirement
Also known as uncrystallised funds pension lump sum or UFPLS. You can use your retirement savings to provide a single cash sum of up to 100% of your retirement savings, 25% being tax-free and the remaining 75% being taxable (some or all of which might be at the higher tax rates). You can also take smaller, multiple cash sums in which case 25% of each cash sum is tax-free with the remainder being taxed.
Company
Experian Finance plc and any other group company which participates in the Plan.
De-risking phase
For Lifestyle investors, this is the period prior to your Target Retirement Age when your retirement savings start to be switched in to funds more appropriate to how you intend to take your retirement benefits.
Default investment option
The Plan’s default investment option is the Lifestyle option, which is where your retirement savings will be automatically invested if you don’t make an investment choice on joining the Plan.
Fund objective
What the fund aims to do. There are many types of funds available with various objectives; for example, income funds, growth funds and value protection funds.
Growth phase
For Lifestyle investors, this is the period when your retirement savings are primarily invested for growth. The aim is normally to achieve a return in excess of inflation so as to protect against inflation risk.
Hedging
A technique used by investors to reduce the effect of currency movements on investment performance. The Plan’s passively managed Global Equity Fund uses hedging.
Income drawdown
Also known as flexi-access drawdown or drawdown. This is where your retirement savings remain invested and you draw a regular income from your savings as taxable cash sums, with the option of taking up to 25% of your savings as tax-free cash at retirement. Drawdown is not currently available under the Plan. If you wish to take your retirement savings as drawdown you will need to transfer them to an external arrangement which offers this facility such as a self-invested personal pension.
Index
An index is the average investment performance over a set period for a specific group of shares or funds such as the FTSE All Share index.
Inflation
The increase in the cost living. This is typically measured by the Retail Prices Index (RPI) or the Consumer Prices Index (CPI).
Lifetime Allowance
(LTA)
The maximum amount of tax-free savings that you can build up in one or more registered schemes (such as workplace pensions and personal pensions) throughout your entire working lifetime. If the value of your total retirement savings from all registered pension schemes in which you have participated (excluding the State Pension) exceeds this amount when you retire, your fund may be subject to a tax charge on the excess.
Opting-in
Employees can choose to opt in to the Experian Retirement Savings Plan (and/or membership of the SMART arrangements) where membership is not automatic and they wish to participate e.g. Experian employees who aren’t eligible for automatic enrolment into the Plan.
Opting-out
Employees can choose to opt out of membership of the Experian Retirement Savings Plan (and/or membership of SMART) if they do not wish to participate in either arrangement.
Pension input amount
The amount that is tested against the annual allowance for the pension input period. In assessing whether an individual has exceeded their annual allowance, schemes must test the pension input in each year against the annual allowance.
Pension input period
The period over which your contributions, plus those from your employer, are calculated. For the Experian Retirement Savings Plan this is 6 April to 5 April.
Pensionable Pay
The pay on which retirement savings for you and the Company are based. See this page for more details.
Pensionable service
The date you join the Plan, to the earlier of: leaving the Plan, leaving Service, taking your benefits or death.
Plan administrator
The Experian Pensions team at Capita.
Plan year
The financial year of the Experian Retirement Savings Plan runs from 1 April to 31 March. This is the period for which the audited accounts and the annual report are prepared.
Pension Wise
Pension Wise is a free and impartial government service which has been launched to help you understand the options available to you at retirement if you are aged 50 or over. You can get guidance on your options or, if you prefer to speak to someone, you will be able to talk to an impartial guidance specialist on the phone or face-to-face. They’ll talk about the steps you can take to turn your retirement savings into income for your retirement. Visit www.pensionwise.gov.uk or call 0300 330 1001 for further details.
Service
Your continuous employment with the Company (measured in years and months) until the time you retire, leave the Company’s employment, leave the Plan or die, whichever is the earliest.
SMART
A way of paying contributions where an amount equivalent to your normal contributions and, if applicable, AVCs is paid by the Company on your behalf and a corresponding reduction is made to your gross contractual pay. This reduces the amount of National Insurance contributions that you pay.
State Pension age (SPA)
The age at which your State Pension becomes payable. This is 65 for men and 60 for women born before 1950. Between 2010 and November 2018, the SPA for women will be gradually raised to 65. For women born after 1955, the SPA is 65. Women born between 6 April 1950 and 5 April 1955 will have a SPA between 60 and 65. The SPA is increasing age 66, 67 and 68 for men and women born after 6 April 1960.
Statutory minimum retirement age
This is the minimum age from which you may take your benefits (other than in the event of ill-health) and is age 55. However, certain members (who were in active Service on or before 5 April 2006) retain the right to take benefits from age 50.
Target retirement age
This is the age at which you intend to take your retirement benefits. You will be asked to select a TRA if you select one of the Lifestyle options. This age will also be used for retirement benefits projections. If you do not choose a TRA it will be taken as 65 – the Plan’s Normal Retirement Age. This might not be the same as your State Pension Age.
Tax-free cash
On retirement you are entitled to take up to 25% of your fund as tax-free cash under current legislation.
Trustee
Experian Retirement Saving Trustees Limited. This is a Company set up to supervise the running of the Plan. It is a separate legal entity from Experian Finance plc.
Uncrystallised funds pension lump sum (UFPLS)
Also known as cash sum(s) on retirement. You can use your retirement savings to provide a single cash sum of up to 100% of your retirement savings, 25% being tax-free and the remaining 75% being taxable (some or all of which might be at the higher tax rates). You can also take smaller, multiple cash sums in which case 25% of each cash sum is tax-free with the remainder being taxed.