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Glossary

A

Additional Voluntary Contributions

These are any personal contributions that you choose to pay to the DB Section.

Annual Allowance

This is the maximum amount of pension savings that you can make which will qualify for tax relief in any tax year.

Automatic Enrolment

The requirement to enrol most employees and workers in the UK into a pension scheme provided by an employer.

C

Civil Partner

This is the person you have entered into a registered Civil Partnership with under the Civil Partnership Act 2004.

Company

M&G plc or companies whose ultimate parent company is M&G plc. For the avoidance of doubt, this can include the Principal Employer and/or any associated company/employer that offers you membership of the Scheme through your contract of employment. If you joined the Scheme prior to October 2019, the Company was known as Prudential plc but on 21 October 2019, the Company became known as M&G plc.

Consumer Price Index

The official index used by the Government as its measure of inflation. The Government previously used the Retail Price Index as its official index for measuring inflation.

Contracting out

In return for you and the Company paying a reduced level of National Insurance contributions, you stopped building up your second tier State Pension entitlement. The Scheme committed to pay this amount to you as part of your overall Scheme entitlement. The element of your overall Scheme entitlement which relates to you contracting out is called Guaranteed Minimum Pension (GMP).

D

DB Section

Defined Benefit (DB) Section of the Prudential Staff Pension Scheme (Scheme).

DB Section Administrator

The DB Section Administrator is XPS.

DB Section benefits

The benefits payable to you as a result of your membership of the DB Section (and/or those payable to your Spouse/Civil Partner or other Dependant(s) following your death) but excluding any benefits payable in respect of AVCs.

DC Section

Defined Contribution (DC) Section of the Prudential Staff Pension Scheme (the Scheme).

Dependant

Your Spouse or Civil Partner/same sex spouse or any other person who, in the opinion of the Trustee, is financially dependant upon you at the date you take your pension or die.

E

Eligible Child

In most cases, this means your own or adopted child under age 18 or older if still in full-time education/vocational training and the Trustee so decides (though not normally beyond age 23).

F

Final Pensionable Earnings

The earning figure on which your DB Section pension is calculated. An explanation of how your Final Pensionable Earnings is calculated, along with an example, can be found in the Member Booklet.

G

GMP Pension Age

This is currently 60 for women and 65 for men.

Guaranteed Minimum Pension

An element of your pension, if you were an Active member of the DB Section at any time between 6 April 1978 and 5 April 1997 (inclusive), which is a result of you contracting out of either the State Earnings Related Pension Scheme (SERPS) or the Second State Pension (S2P).

L

Lifetime Allowance

The Lifetime Allowance is a limit on the amount of pension benefits that you can accumulate during your working life which will qualify for tax relief.

M

Money Purchase Annual Allowance

If you elect to take your benefits from any other registered pension arrangement using the new pension flexibilities available, for example in the form of an Uncrystallised Funds Pension Lump Sum (UFPLS) you will trigger, for the tax year you draw your benefits (and for future years), a Money Purchase Annual Allowance. This means your tax efficient contributions to any defined contribution scheme will be more restricted (usually to £4,000).

N

Normal Retirement Date

The date at which you are expected to retire. For most members your Normal Retirement Date is age 60 although it is age 65 for some male members. You will have been told if your Normal Retirement Date is not age 60. Your Normal Retirement Date is sometimes referred to as your Normal Pension Date.

P

Pension Input Period

This is the period over which pension contributions are measured to work out whether you have exceeded the Annual Allowance. The Pension Input Period is the same as the tax year: 6 April to 5 April.

Pensionable Service

In general, this means the permanent Service (in years and complete months) you completed with the Company as an Active member of the DB Section.

Pensions Plus

The Company operates a salary sacrifice arrangement called Pensions Plus, for more information please see the Company’s document Your Guide to Pensions Plus or visit www.pensionsplusatpru.co.uk.

Principal Employer

The company which participates in the Scheme and has certain decision making powers under the Trust Deed and Rules, such as agreeing discretionary pension increases. For the Scheme, this is The Prudential Assurance Company Limited.

Q

Qualifying Recognised Overseas Pension Scheme

(QROPS) This is an overseas pension scheme that meets certain requirements and which HMRC recognises as eligible to receive transfers from registered pension schemes in the UK.

Qualifying Recognised Overseas Pension Scheme (QROPS)

This is an overseas pension scheme that meets certain requirements and which HM Revenue & Customs recognises as eligible to receive transfers from registered pension schemes in the UK.

R

Registered pension scheme

A pension scheme that is registered with HM Revenue & Customs under the provisions of the Finance Act 2004.

S

Scheme

Prudential Staff Pension Scheme.

Scheme Actuary

An appropriately qualified individual who advises the Trustee on actuarial matters relating to the Scheme.

Second State Pension

In 2002 the Government replaced the State Earning Related Pension Scheme (SERPS) with the Second State Pension (S2P). The principles were broadly the same in that S2P was a second tier of State Pension provision based on your earnings during any period you were not contracted out.

Service

Your employment with the Company.

SGMP

The minimum pension the Scheme must pay to your Spouse/Civil Partner as a result of you contracting out of either the State Earnings Related Pension Scheme (SERPS) or the Second State Pension (S2P). Please see the definition in the Glossary for Guaranteed Minimum Pension (GMP) for further information.

Spouse

This is the person to whom you are legally married. This includes opposite sex spouses and same sex spouses.

Spouse GMP

The minimum pension the Scheme must pay to your Spouse/Civil Partner as a result of you contracting out of either the State Earnings Related Pension Scheme (SERPS) or the Second State Pension (S2P). Please see the definition in the Glossary for Guaranteed Minimum Pension (GMP) for further information.

From 6 April 1978 to 5 April 2002 this was the second tier of State Pension. In addition to your Basic State Pension the State would pay an additional pension based on your earnings during any period you were not contracted out.

State Pension

The pension you may receive from the State when you reach the State Pension Age.

State Pension Age

The age at which your State Pension becomes payable.

T

Trustee

Prudential Staff Pensions Limited, a limited company, is the Trustee of the Scheme and is responsible for ensuring that the Scheme is administered in accordance with the Trust Deed and Rules. The Trustee holds, manages and invests assets for the benefit of members and their beneficiaries.

Trustee Director

An individual, either appointed by the Company or nominated by the Scheme members, who along with other Trustee Directors form the board of the Trustee.