Glossary

Annuity

An insurance policy with an individual which provides a regular income from the time they start to receive their pension until their death (or, in the case of a Dependent Child, upon reaching the age specified in the Policy Documentation).

 

Beneficiaries

Individuals who may be entitled to pension benefits under a Policy in the event of the Policyholder’s death.

Defined benefit pension scheme

An occupational pension scheme which calculates benefits based on a member’s pensionable salary and pensionable service. ‘Final Salary’ and ‘Career Average’ (CARE) are both types of defined benefit pension scheme.

Dependant

The Policy Documentation will detail whether any pension may be payable to an adult dependant on the Policyholder’s death and, if so, who may be eligible for this pension (usually the spouse, civil partner or, in some cases, another adult who is financially dependent on the Policyholder).

Dependent Children

The Policy Documentation will detail whether a pension may be payable to Dependent Child(ren) on the Policyholder’s death and, if so, who would be eligible for the pension(s) (usually the biological or adopted children aged below a specified age).

De-risking

The mitigation of financial and longevity risk inherent in defined benefit pension schemes

Expression of Wish form

In some circumstances, a lump sum may be payable on a Policyholder’s death. An Expression of Wish form indicates the person/people/organisation(s) that the Policyholder would like to receive any lump sum payable under your Policy in the event of their death.

Please note, a completed Expression of Wish form at the date of your death helps us decide how any lump sum should be distributed but is not binding. Rothesay Life will use its discretion when distributing any lump sum payable on death.

Lifetime Allowance

A limit on the value of pension benefits that an individual can receive from all their pension arrangements without an extra tax charge being triggered. For the 2018/19 tax year, this limit is £1,030,000.

Longevity risk

The risk to an annuity provider or a defined benefit pension scheme of policyholders/members living longer than assumed when calculating the expected cost of providing their pension benefits.

Normal Retirement Date

The Policyholder's Normal Retirement Date will be defined in the Policy Documentation. If they choose to retire before this date their pension is generally reduced as it is expected to be paid for a longer period of time. If they delay their pension until after their Normal Retirement Date it is generally increased as it is expected to be paid for a shorter period of time.

 

Part VII Transfer

A legal process under which an insurance company transfers part or all of their annuity business to another insurance company. The process includes obtaining High Court approval under Part VII of the Financial Services and Markets Act 2000.

Personal data

Any information from which a living individual can be identified, including:

  • Information such as names, addresses, telephone numbers, email addresses, photographs, voice recordings and financial information
  • Expressions of opinion and indications of intentions about individuals (and their own expressions of opinion/intentions)
  • Information which on its own does not identify someone but which would identify them if put together with other information which we have or are likely to have in the future
Policy

An individual policy with Rothesay Life Plc. This may be as a result of a buy-out, Part VII Transfer or our acquisition of another insurer.

Policy Documentation

This is the detailed documentation which details the benefits payable under the Policy and forms the legal contract between Rothesay Life Plc and the Policyholder. If the Policy was originally issued by another insurance company and was transferred to us via a Part VII Transfer or as part of an acquisition of the other insurer, the Policy Documentation would have been issued by the previous insurance company.

Policyholder

An individual with a Policy as a result of a buy-out or Part VII Transfer to Rothesay Life.

Privacy notice

A privacy notice sets out how personal data is processed and protected, and individuals’ rights surrounding this data. 

Scheme

The pension scheme in which the Policyholder built up the pension benefits that Rothesay Life are now obliged to pay under their Policy.

Serious Ill Health

Under current legislation you may be paid a Serious Ill Health cash lump sum if:

  • your pension benefits have not yet come into payment
  • we have received evidence from a registered medical practitioner that you are expected to live for less than one year
  • you have not used up all of your Lifetime Allowance at the point the payment is made

If you are over 75, the lump sum would be taxed as pension income at your marginal rate.

Transfer value

The cash amount available to transfer to a registered pension arrangement in turn for a Policyholder surrendering their rights under their Policy. Transfer values are only available to Policyholders who are not yet receiving their pension. Please click here for more details.