Glossary

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Active member

An employee who is currently paying into their employer's pension scheme and building up benefits in it.

Actuary

An adviser on financial matters involving probabilities, often relating to mortality. They usually help during scheme valuations to assess if a scheme has enough funds to cover its responsibilities.

Additional Voluntary Contribution (AVC) arrangements

Plans designed to help you save more for retirement. They involve paying extra contributions on top of the contributions required to be a Scheme member. Members of the final salary sections of the RPS have access to two AVC arrangements: BRASS and AVC Extra.

Annual Allowance

The maximum that can be saved into your pension pot each year and still receive tax relief.
  
The Annual Allowance is currently £40,000 for most people. However, a lower amount may apply for high earners (see ‘Tapered Annual Allowance’), and those who have taken benefits from defined contribution arrangements using the flexibilities that were introduced in April 2015 (see ‘Money Purchase Annual Allowance’). 

Annual Allowance used by BRASS contributions

This is the amount of Annual Allowance your BRASS contributions alone will use up at the level you are currently paying.

This amount includes any BRASS matching contributions your employer may make and is the amount that would be measured against the Money Purchase Annual Allowance. 
 
Please see the Planner breakdown for more information about the Annual Allowance.

Annual Benefit Statement (ABS)

This is the yearly statement sent to members of the IWDC Section. It provides you with an estimate of how much your benefits may be worth when you reach your Normal Retirement Age.

Annual Management Charge

A charge made by investment fund managers for management and administration services. Additional Voluntary Contribution (AVC) funds all have an associated annual management charge.

Annual Pension Estimate (APE)

This is the yearly statement sent to members who are still paying into the final salary sections of the RPS. It provides you with an estimate of how much your RPS benefits may be worth when you reach your Normal Retirement Age, as well as information about any BRASS contributions you have made.
 
Your APE also includes details about the options available when you take your benefits; the lump sum and dependant’s pension that may be paid if you die before claiming your benefits; your normal pension contributions; and tax allowances.
 
You can view a copy of your most recent APE when you log in to myRPS (or register) and look under ‘My pension’.

Annuity

A policy that you purchase (usually using funds that you’ve built up in a pension arrangement) which provides you with an income for life (or sometimes a set period of time).

Auto-enrolment

If you meet certain criteria, your employer is legally required to enrol you into a pension scheme that meets minimum quality requirements. This process is known as ‘auto-enrolment’.

Automatic re-enrolment

Your employer must re-enrol you into their pension scheme every three years if you opted out and still meet the enrolment criteria. This process is known as ‘automatic re-enrolment’.

AVC Extra

AVC Extra is an Additional Voluntary Contribution (AVC) arrangement for Railways Pension Scheme members paying into one of the final salary sections of the RPS. It is available to any members who wish to pay AVC contributions in excess of those which can be paid into BRASS.