projected unit method

A method for calculating technical provisions which takes full account of future salary increases.

priority order

The provisions contained in the scheme documentation or in overriding legislation setting out the order of precedence of liabilities to be followed if the scheme is in wind up.

preserved benefits

Benefits arising on an individual ceasing to be an active member of an occupational pension scheme, payable at a later date (eg a member who leaves that employment before retirement date).

Retail Prices Index RPI

The index of retail prices (forall items) published by the Office of National Statistics, which is used to determine the rate of inflation over the previous 12 months. Increase to state pensions and index-linked gilts are equal to the rate of change in the RPI, while increases toprivate pensions in payment are dependent on the rate of change in the RPI.

State Second Pension.S2P

The earnings related element of the state pension scheme which has replaced the State Earnings Related Pension Scheme (SERPS) to enhance the basic state pension.

salary sacrifice

A written agreement between the employer and employee whereby the employee forgoes part of his/her future earnings in return for a corresponding contribution by the employer to a pension scheme.

schedule of contributions

Specifies the contributions payable by the employer over a given period of years,and includes any special contributions paid under a recovery plan.

scheme booklet

A booklet for members which should clearly set out the benefits offered by the scheme and how the schemeis run. The scheme booklet isgiven to all members of the scheme when they join.

scheme lawyer

A legal adviser to the scheme who advises trustee boards on the appropriate orrelevant provisions of:
*. trust and pensions law
*. their own scheme's trust deed and rules

Statement of funding principles.SFP

Sets out a scheme's policy for meeting the statutory funding objective for an ongoing scheme (DB schemes only).