Glossary

Additional Voluntary Contributions

In addition to Ordinary Contributions of 5% of your pay, you can also pay Additional Voluntary Contributions (or “AVCs”). You can contribute up to 10% of pay as AVCs.

For every £1 you pay as AVCs, the Company pays 50p more into the Lifestyle Plan. So, if you contribute AVCs of 10% of your pay, the Company will contribute a further 5% of your pay.

Even if you pay 5% Ordinary Contributions and 10% AVCs, you can still save more into your pension by making Extra Contributions.

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Defined Contribution Pension Scheme

See Money Purchase Pension Scheme.

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Extra Contributions

If you are already contributing Ordinary Contributions of 5% of your pay and Additional Voluntary Contributions of 10% of your pay, you can still save even more into the Lifestyle Plan. Such further savings would be Extra Contributions (ECs).

Whilst the Company does not pay any more contributions in respect of your ECs, you would still get tax relief on them.

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Lifestyle Account

We allocate all your contributions and the Company’s contributions for you into your “Lifestyle account” which is then invested. Your Lifestyle account is therefore part of the overall funds of the Lifestyle Plan but we keep track of the contributions and changes in value for each member separately.

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Money Purchase Pension Scheme

The Lifestyle Plan is sometimes referred to as a “Money Purchase” pension scheme or a “Defined Contribution” pension scheme. This means that contributions made by you and the company are invested until you are ready to draw your benefits. The benefits at retirement may be partly in the form of a lump sum and the balance of your accumulated account is then normally used to buy an annuity with an insurance company. There are a variety of choices available to you at retirement - see Lifestyle leaflet “Your Pension - Your Choice” for more information.

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Ordinary Contributions

In the Lifestyle Plan, members have a choice of how much to pay. They can contribute 0%, 2.5% or 5% of pay as Ordinary Contributions.

The more a member pays, the higher the Company’s contributions into the Lifestyle Plan.

Further contributions can be made, in the form of Additional Voluntary Contributions and Extra Contributions.

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Pensionable Earnings

This means actual salary including bonuses or overtime. Any such item may be excluded if notified by the company before it is paid.

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