Glossary
Special terms used to describe the CNPP benefits are described below:
| Term | Description |
|---|---|
| Active | An active fund is where investment managers aim to outperform a particular index (e.g. the FTSE All- Share) by making decisions about the type of investment to buy or which stocks to buy. This, however, does not always result in the fund outperforming the index. |
| Additional Voluntary Contributions (“AVCs”) | AVCs are a way of topping up your pension. You pay additional contributions to a money purchase arrangement. Your accumulated fund is used to buy yourself an extra pension in addition to your Plan pension. |
| AMC | Annual Management Charge, is the only charge which is directly levied upon the members account. It is expressed as a single percentage. This percentage charge is levied on your own fund for the investment management. No other charge is directly applied. |
| Annuity | A pension that is purchased from an insurance company on retirement. |
| Asset Allocation | This is how your assets are allocated to different countries (UK and overseas) and between stocks and bonds. |
| BGI | Barclays Global Investors is one of the world’s largest fund managers and is a subsidiary of Barclays PLC. |
| Bond | See Fixed Interest Bond and Index-Linked Bond. |
| Capital Protection | This is a means of holding assets which is very secure. |
| Cash | This is where money is invested in deposits with returns similar to high street banks and building societies. |
| Child and children | A child is a person who is a child of yours or certain other people who are financially dependent on you and aged less than 17 or in full time education and aged 23 or less. A child is not eligible if they were not a child at the date your active membership ceased, or if they are married or cohabiting. |
| Civil partner | Your registered same sex partner as defined under Section 1 of the Civil Partnership Act 2004. |
| Contracted out | If you join the Plan, you will ‘contract out’ of the State Second Pension (S2P). You and your employer will pay the lower rate of National Insurance contributions and when you retire, a deduction at the level of the old SERPS pension will be made to your State Second Pension (S2P) in respect of the period while you were a member of the Plan. You will still get the Basic State Retirement Pension if you have paid enough National Insurance contributions. |
| CNPP Actuary | Financial Advisors for the pension plan |
| CPS | The United Kingdom Atomic Energy Authority Combined Pension Scheme |
| Former CPS members’ benefit structure | A benefit structure under the Plan available to transferring members, who were previously eligible to be members of the United Kingdom Atomic Energy Authority Combined Pension Scheme (“CPS”). |
| Death Nomination Form | Form to nominate person(s) to receive benefits which may be payable on death under the rules of the CNPP. |
| Dependant | A Dependant can be your husband, wife, partner, civil partner, or anyone else who relies on you financially (as determined by the Trustee). |
| Earnings cap | Pensionable earnings are subject to a maximum of the Earnings cap. In the 2006/07 tax year this is £108,600. In subsequent years the Earnings cap will be increased in line the increase in the Retail Price Index (RPI) and be calculated in accordance with the Plan rules. |
| Enhancement and enhance | If you retire early because of ill health, die in service, or are made redundant, we may increase the Reckonable service you have in the Plan when we work out your pension. This is called an enhancement. |
| Equity | An equity is a shareholding in a company. For example, company shares listed on the London Stock Exchange. |
| Family benefits | Benefits paid to your spouse |
| Fixed Interest Bond | In this case a fixed interest bond is an investment asset issued by the Government in order to raise money. In return the bond holder will receive regular interest payments as well as the repayment of the original face value used to purchase the bond (the capital) at a specified date in the future. Interest payable is received as fixed amounts. |
| Fluctuating emoluments | This is any part of a member’s earnings which are not paid on a fixed basis and are additional to the basic wage or salary. They include overtime, commission, bonuses or benefits in kind as long as they are assessable to tax under Case I or II of Schedule E. |
| Full time equivalent | This is applied to any Pensionable final earnings earned whilst carrying out part-time service. The Pensionable final earnings will be increased by multiplying by the ratio of relevant part-time to full-time hours. |
| FTSE (Financial Times Stock Exchange) All-Share Index | A broad UK stock exchange index (covering around 800-900 companies) prepared by the Financial Times together with the Faculty and Institute of Actuaries and the London Stock Exchange. |
| FTSE All-World (Ex UK) Index | This is a stock exchange index covering a large range of overseas stocks (excluding the UK). |
| Index Fund | See Passive. |
| Index-Linked Bond | An index-linked bond is similar to a fixed interest bond except that the interest payments made to the bond holder rise in line with the rate of inflation and the amount repaid at the end of the life of the bond is linked to inflation also. |
| Inflation | The general increase in prices over time. The Retail Prices Index (RPI) is the benchmark of inflation in the UK and represents the changing cost of an average household’s purchases of goods and services. |
| Lead Company | The Nuclear Decommissioning Authority, or any other company or organisation that may take over the role from them. |
| Long Term Capital Growth | This is where the fund aims to grow the sum of money invested as much as possible whilst accepting the risk of the ups and downs in the investment markets which may mean you might not get back what you invested. |
| Medical grounds | For the purpose of receiving your benefits before your Pension age due to ill health, Medical Grounds means you are unable to undertake your normal duties of employment or a reasonable alternative, or your earnings capacity is significantly reduced. |
| Passive | A passive fund aims to reproduce the performance of a relevant index. For example, if a passive fund is designed to provide the same performance as the FTSE 100, then this fund will hold the stocks of the 100 companies included in this index in the same proportions as the index, and therefore achieve the same performance as the index. |
| Pension age | This is the earliest age you can take your pension without it being reduced because of early payment. Pension age is age 60 or as stated in your contract of employment. |
| Pensionable earnings | This is your permanent basic pay, responsibility allowances plus any other allowances which werepensionable under the CPS or which are specified by the NDA to be pensionable. Your contributions are based on pensionable earnings. Certain members, who were employed before 1991 and elected to have their Shift pay pensioned through the CPS, will continue to have their Shift pay included in their Pensionable earnings. |
| Pensionable final earnings | This is your Pensionable earnings in whichever 365 day period in the last 1095 consecutive days of Reckonable service gives the highest figure. If you have less than 3 years’ service, your Pensionable final earnings will be calculated over the period of service you have completed. Your pension is based on Pensionable final earnings. For people who have transferred benefits this would include Pensionable earnings over the period of their service in the CPS. |
| Permanently incapacitated child | Child of a member in the Plan that is likely to be permanently disabled and hence unable to earn their own living. |
| Plan | The Combined Nuclear Pension Plan. |
| Preserve and preserved | If you leave the Plan with more than two years’ Qualifying service, you can leave the pension benefits you have built up. We will then normally pay you a pension when you reach Pension age. Alternatively, you can choose to transfer your preserved pension before you retire. |
| With-Profits | This type of policy is offered by insurance companies and is where money is invested in a mixture of shares, property and bonds. Usually bonuses are added to the policy each year with a bonus paid when the policy matures, i.e. at retirement. The bonuses are based on the performance of the underlying investments and are designed to smooth the highs and lows of the stock market. |
| Property | This represents investment in commercial property spread across different sectors (e.g. shops, offices and industrial units) and across different regions in the UK. Whilst the income and capital value of commercial property can fall in value as well as rise, the ups and downs tend to be less pronounced than that of equities |
| Qualifying service | This is the years and days that you have been a member of the Plan or the CPS and it qualifies you for certain benefits. Qualifying service in the CPS will count as Qualifying service under the Plan whether or not you transfer your past service benefits from the CPS. No adjustment is made for part-time service. For many people, Qualifying service is the same as their Reckonable service. But for some people, e.g. those who work part time, their Qualifying service will be more than their Reckonable service. |
| Reckonable service | This is the years and days that count towards your pension. Generally, Reckonable service is the number of days that you are a member of the Plan including any transfers in or additionally purchased service. Transferring members who have opted to transfer their benefits previously built up in the CPS into the Plan will be credited with a period of Reckonable service in the Plan. The period of Reckonable service credited will reflect the member’s benefit entitlement within the CPS. |
| RPI | Retail Price Index, An inflationary indicator that measures the change in the cost of a fixed basket of retail goods. Previously used in indexing the public sector pension scheme and will continue to be used under the CNPP. |
| SERPS | The State Earnings Related Pension Scheme. These are earnings related pension benefits provided by the State in addition to the Basic State Pension. SERPS was replaced by the State Second Pension (S2P) from 6 April 2002, but SERPS levels of benefits are still used for contracting out purposes. |
| Shift pay | This is earnings from shift work that is non-pensionable in terms of the main Plan benefits and eligible instead for benefits under the Shift Pay Pensions Plan. Members, who were employed by UKAEA/BNFL before 1991 may have chosen to have their Shift pay pensionable through the CPS in which case their Shift Pay will continue to be pensioned under the Plan. In all other cases Shift Pay will be pensioned under the SPPP. |
| Shift Pay Pensions Plan (SPPP) | You pay contributions based on your Shift pay to a money purchase arrangement. Your accumulated fund is used to buy yourself an extra pension and/or lump sum in addition to your Plan pension. |
| Spouse | The person you are legally married to, or who is your Civil Partner at your date of death. An ex-husband or ex-wife you are legally divorced from, or ex Civil Partner, cannot receive a spouse’s pension. |
| State Second Pension (S2P) | This is the additional state pension (on top of the basic state Retirement Pension) that replaced the State Earnings-Related Pension (SERPS). The amount you receive depends on your National Insurance contributions and whether you have been contracted-out during your working lifetime |
| Transferring members | Employees compulsorily transferring employment who join the Plan. |
| Trustee | The trustee board of the Plan |
