A glossary to provide a brief description of pensions terminology and acronyms.

Terms and abbreviations

50/50 section 

Members of the LGPS can decide to enter the 50/50 section of the scheme. 50/50 section members pay half their normal pension contribution rate and build half the normal pension they would in the main section.

Accrual rate

The rate at which a member's benefits build up. The accrual rate from 1 April 2014 is a 49th. Before 1 April 2008 the accrual rate was an 80th and from 1 April 2008 to 31 March 2014 it was a 60th. More information is on our page, how your pension is worked out.

Active member

Also called a 'contributing member'. Someone who is paying LGPS contributions. We have a section of the website for active members.

Actuarial reduction

Also called percentage reduction. The amount by which pension and lump sum benefits are reduced if they are taken before normal retirement age.

Actuarial valuation

A three yearly valuation of the Fund undertaken by the actuary, to ensure the Fund is sufficiently well managed and that its assets meet its liabilities. Employer contribution rates are set as part of the valuation process and we publish the results on our actuarial valuations page.


A qualified, independent person or body, appointed by the administering authority in order to value the Fund and therefore set contribution rates. Our actuary is currently Hymans Robertson LLP.

Additional pension contributions

From 1 April 2014 additional LGPS pension is purchased by Additional Pension Contributions (APCs). APCs have replaced ARC from 1 April 2014.

Additional regular contributions

Effective before 1 April 2014, additional LGPS pension is purchased by Additional Regular Contributions (ARCs). ARCs were replaced by Additional Pension Contributions from 1 April 2014.

Additional voluntary contributions

AVCs. Payments made within certain HM Revenue & Customs limits to an approved provider (normally an assurance company) in order to provide additional benefits to those payable from the LGPS. Our in-house AVC provider is currently Prudential.

Administering authority

A body required to maintain a pension fund under the LGPS regulations, usually a local authority. Our administering authority is Derbyshire County Council.

Admission Agreement

An agreement made between the administering authority, a scheme employer and a contracted company to allow the contractor to become part of the LGPS.

Admission body

Also called admitted body. An employer who is carrying out work that is normally of a similar nature to local government work and who has entered into a contractual arrangement with the administering authority to be part of the LGPS.

Annual allowance

The maximum annual increase to pension benefits before the member is subject to a tax charge. More details are on our annual allowance page.

Annual pension

Yearly amount of pension, payable for life. Quoted in annual benefit statements at its unreduced rate.

Application for adjudication of disagreements procedure

AADP. An appeal procedure governed by regulation providing any current or former scheme member with the opportunity to settle any dispute or complaint they may have in respect of any decision made regarding their entitlements under scheme rules. We have a feedback, complaints and appeals page.

Approved scheme

A scheme approved under Chapter 2 Part 4 of the Finance Act 2004, thereby granting tax relief on contributions paid.

Augmentation costs

The costs imposed on LGPS employers who choose to retire members of the scheme before their normal retirement date and award them additional pension in compensation for their loss of office.

Authorised payments

Payments that a pension scheme is allowed to make, that are not subject to a specific tax charge.


Anyone due to receive payment(s) from the LGPS.

Benefit crystallisation event

Any time pension benefits are taken from a pension scheme. Part or all, of the person's lifetime allowance is used at this point.

Bulk transfer

The transfer of pension rights between one occupational scheme and another on behalf of a group of staff transferring from one employer to another. This type of transfer will usually provide better benefits for the transferring members than individual Cash Equivalent Transfer Values would provide.

Career average revalued earnings

CARE. From 1 April 2014 the LGPS became a career average revalued earnings scheme. The pension built up from 1 April 2014 is based on a CARE basis. The pension built up prior to 1 April 2014 is linked to final salary. We have a page about how your pension is worked out.

Casual employee

An employee who works no fixed hours but works as and when required. Scheme regulations do not define the term casual.

Certificate of protection

A certificate issued to a member up to 31 March 2008, if they had to take a reduction in pay (due to a decision by their employer). The certificate protects the member's higher pay for the purpose of calculating pension benefits, within certain conditions. Since 1 April 2008 members can apply to their employer using the reductions in pensionable pay form. If the form is authorised, it allows us to use the best period of pay during their last 13 years of paying into the LGPS when calculating their benefits built up before 1 April 2014 (providing the reduction was within 10 years of leaving).

Certified amount

The deduction made from a refund of contributions relating to the difference between the member's contracted out national insurance contributions paid and the not contracted out contributions that would have been paid had the member not been in the LGPS.

Child(ren)'s pension

Pension payable to a member's dependant child or children. Eligible children are either under 18, under 23 if in full time education or training, or 18 or older if unable to engage in gainful employment because of physical or mental impairment (and the child was dependent on the member at the date of death because of that impairment.).

Civil partnership

A civil partnership is a legal relationship between two people when they register as civil partners of each other.

Club scheme

A scheme within the public sector, or one outside the public sector who has agreed to use the public sector method of calculating transfer values.

Cohabiting partner

A cohabiting partner is someone living with a member as if they were a married couple or civil partners. For a partner to be eligible for a survivor's pension they must have met the following conditions for at least two years up to the member's death:

  • the partners have been living together and free to marry each other, or enter into a civil partnership with each other
  • neither have been living with someone else as if they were a married couple or civil partners
  • one has been dependent on the other, and both have been financially interdependent on each other

Commuted pension

May be called compounded pension. When a member's pension is very small and is therefore paid as a one off capital value in order to extinguish the ongoing liability.


If you would like to notify us a dissatisfaction, you can use our feedback form. Formal complaints can be made using our complaints form. More information is on our feedback, complaints and appeals page.

Contracted out

The LGPS was contracted out of the State Earnings Related Pension Scheme (SERPS), and the State Second Pension (S2P) from 6 April 1978 to 5 April 2016. This meant that most LGPS members paid reduced National Insurance contributions.

Contributory scheme

A scheme that requires its members to make contributions from their pay. Active LGPS members pay contributions.

Conversion of benefits

When a member elects to convert part of a pension into additional lump sum.

Death grant

An amount paid to a member's estate or nominated beneficiary or beneficiaries in the event of their death in service, death in retirement or death of as a deferred member.

Deferred benefits

May be called preserved benefits. Benefits retained the Fund when a member leaves without entitlement to the immediate payment of those benefits. Provided the benefits are not transferred out, deferred benefits are paid unreduced from the member's normal retirement date, but can be paid from 55 years old at a reduced rate.

Defined benefit scheme

A scheme which pays pension benefits defined by regulation and are not dependent upon contributions paid or on how well those contributions are invested.


The power given to employers or administering authorities to choose how they will apply certain LGPS regulations.

Discretions policy

A statement produced by the Fund, or by its employers which sets out how they have resolved to follow certain discretions available to them under the LGPS.

Early retirement

The payment of pension benefits to a member before the member has reached their normal retirement age.


When a court order on completion of a divorce states that part of a member's benefits should be earmarked for their former spouse. More information is on our pensions and divorce page.

Efficiency dismissal

When a member who is aged 55 or over is asked to retire by their employer in the interests of the efficient exercise of the employer's functions. Usually as part of a wider business efficiency review, or exercise. Members are treated by the Fund the same as voluntary and compulsory redundancies.

Employer Pension Scheme Reference

EPSR. A unique reference allocated to an employer by a pension scheme or fund. Our employer numbers start P9 followed by 5 numbers.

Expression of wish

A current or former scheme member can choose whom they would like to receive any death grant payable from the Scheme. This is sometimes called a nomination but it should be noted that such a nomination is not legally binding and is an expression of wish only. The administering authority has ultimate discretion when releasing death grant payments.

Final pay

The pay figure used in the calculation of pension benefits from membership before 1 April 2014. In most cases, it is the average full-time equivalent pay, plus pensionable allowances, from last year of being an active member. Pay from one of the previous two years can be used if it is higher.

Final salary scheme

A type of defined benefit pension scheme which uses the member's final pay and length of membership to work out the benefits payable. Benefits are not based on the contributions paid by the member. LGPS benefits from membership up to 31 March 2014 are calculated on a final salary basis. Pension built up from 1 April 2014 is calculated under a career average revalued earnings basis. We have a page called how your pension is worked out.

Free standing additional voluntary contributions

FSAVC. Similar to AVCs but the contributions are paid to a provider of the member's choice and not to the approved in-house AVC scheme provider.

Full-time equivalent pay

FTE pay. The salary or wage of anyone before it is reduced for the number of hours actually worked.

Gainful employment

Employment for not less than 30 hours in each week for a period of not less than 12 months.

Guaranteed Minimum Pension

GMP. The amount of pension that an LGPS member is guaranteed to receive that is equivalent to the pension that would have been paid under SERPS, had the member not been contracted out of it.


An electronic method for employers to report member data to the Fund on a monthly basis. More information is on our i-Connect page.

Ill health retirement

When an employer terminates a member's employment on the grounds of ill health, because they are permanently incapable of doing their job because of it. The member is judged to have a reduced likelihood of engaging in gainful employment before their normal retirement age.

Independent registered medical practitioner

IRMP. A practitioner chosen by the employer and approved by the administering authority to make opinions on ill health retirement cases. They should be qualified in occupational health medicine and registered with the General Medical Council.

Index linking

The inflation proofing of LGPS benefits, in line with the Consumer Prices Index (CPI).

Inter-fund adjustment

A transfer of pension rights on behalf of a member who has left one local government employment to take up another, in a different region of the country.

Lifetime allowance

LTA. Sometimes called standard lifetime allowance. The value of pension benefits an individual can build up before a lifetime allowance charge is applied. The charge is not applicable to benefits taken from 6 April 2023.

Lifetime allowance charge

The tax payable on the value of any benefits in excess of the lifetime allowance. The charge is not applicable from 6 April 2023 and due to be abolished from 6 April 2024. For benefits due before 5 April 2023, if the excess was taken as a lump sum, it was taxed at 55%. If it was taken as income it was taxed at 25%.

Lifetime allowance enhancement factor

Individuals granted protection were provided a factor to apply to the lifetime allowance, in order to create their own personal lifetime allowance. All benefits would then be tested against the enhanced figure.

Lifetime annuity

A series of regular payments made to an individual for the remainder of their life. A secured pension paid by an insurance company.

Lower earnings limit

The amount of pay that can be received before having to pay National Insurance contributions. The current limit can be found at Rates and allowances: National Insurance contributions

Lump sum retirement grant

Also known as statutory retirement grant or lump sum. A tax free lump sum paid at retirement.

Main section

Members of the LGPS are automatically enrolled into the main section of the LGPS on joining. Members pay their normal pension contribution and receive the normal pension build up. An alternative to the main section is the 50/50 section.

Minimum pension age

The minimum age a member must be to receive their pension. Currently 55 years old. There is no minimum age for ill health retirement.


A reduction made to LGPS pensions from State Pension age of certain members who in the past had paid modified contributions, which were less than the normal rate.

Money purchase scheme

A scheme that uses the contributions paid by the member (and the employer if any) to calculate the benefits payable, rather than final pay or an accrual rate.

My Pension Online

Our secure self-service portal that gives members access to pension projectors and their annual benefit statements. Members can register for the service using our access form. More information is on our My Pension Online pages.

National Insurance contracted out earnings

The proportion of earnings on which contracted out National Insurance contributions had been deducted.

Nomination of beneficiary

Members can make an expression of wish, to nominate those who they would like to receive a lump sum, that might be payable when they die. The expression of wish form is on our forms and guides page.

Non-contributory scheme

A scheme that does not require its members to make any contribution from their pay.

Non-club scheme

A term used to describe a scheme which can pay and receive transfer values, but does not use the public sector method of calculation.

Normal retirement age

NRA, also called normal pension age. State Pension age for benefits built up from 1 April 2014 (but with a minimum age of 65). 65 for membership before 1 April 2014 (although protections apply to certain members).

Pensionable pay

Normal pay plus any additional payments defined in an employee's contract of employment as being pensionable. To be pensionable, pay must be taxable. From 1 April 2014 pensionable pay includes non-contractual overtime. Full details are on our page about pensionable pay.

Pension credit

Benefit granted to an ex-spouse of a member following a divorce settlement and in accordance with a court order (an alternative to earmarking).

Pension debit

When a scheme member's benefits are reduced in order to provide his or her ex-spouse with a pension credit following a divorce settlement (an alternative to earmarking).

Pension input amount

The total value of contributions paid during the pension input period. We have a page about the annual allowance.

Pension input period

A period of 12 months for annual allowance purposes, during which contributions are paid. The period is the tax year 6 April to 5 April, which differs to the scheme year, 1 April to 31 March.

Pension Scheme Registry

PSR. A Pension Scheme Registry number is an eight digit reference number, allocated to schemes by the Pensions Regulator when a scheme is registered. Our PSR number is 10079128.

Pension sharing

The splitting of a member's benefits upon divorce. We have more information on our divorce or dissolution of a civil partnership page.

Pensions increase

The amount by which LGPS benefits are increased annually and based on movement in the Consumer Prices Index (CPI) during the 12 months to September.

Primary protection

When the lifetime allowance was introduced on 6 April 2006, individuals with pension benefits of more than £1.5 million could apply for primary protection. They were given an enhancement factor to calculate a personal lifetime allowance.

Public sector transfer club

A group of public sector employers which have agreed a common basis of calculating transfer values.

Rates and adjustment certificate

A certificate issued by the actuary following a valuation of the Fund which sets out the employer contribution rates payable by each of the Fund's LGPS employing authorities. We publish the valuation reports which include the certificate.

Redundancy retirement

Term for when a member who is made redundant by his employer, is entitled to the immediate payment of his retirement benefits as he is aged 55 or over. We have a page about redundancy.


For LGPS purposes it means re-employment with another local authority or other LGPS employer which is designated as being open to new members.

Registered scheme

A scheme approved by HM Revenue & Customs. The LGPS is a registered public scheme.

Rule of 85

The point at which a member's age in whole years when added to membership in whole years equals 85 and therefore some of their benefits may be paid without any actuarial reduction being applied. Protections vary from person to person and more information is on our rule of 85 page.

Shared cost additional voluntary contributions

SCAVCs. An AVC scheme set up by a scheme employer, into which they can make contributions as well as the employee.

Shortfall costs

Sometimes called stain costs. The costs LGPS employers have to pay when they retire members of the scheme before their normal retirement ages, either on the grounds of redundancy or in some cases flexible retirement. 

Spouse's pension

Also called survivor's pension. The pension paid to a husband or wife of a member that has died. We have a page called your pension when you die.

State Earnings Related Pension Scheme

SERPS. A top-up to the basic State Pension for individuals who had been members of pension schemes that weren't contracted-out.

State Second Pension

S2P. This scheme replaced State Earnings Related Pension Scheme (SERPS). S2P is a top-up to the basic State Pension. Members of the LGPS were automatically contracted-out of S2P before 6 April 2016.

Statutory scheme

A scheme (such as the LGPS) established by Acts of Parliament.

Transfer value

The value of either: A member's benefits paid to an alternative pension scheme on leaving the LGPS (as an alternative to deferred benefits or a refund of contributions); or a member's benefits paid by a previous employer into the LGPS upon joining the scheme. We have a page about transfers providing information for independent financial advisors.

Trivial commutation lump sum

Small pensions can be fully commuted into a single lump sum. 75% of the sum is taxable as income. More information is on our lump sums and tax page.

Unauthorised payment

A payment that will automatically attract a tax charge of 40%. An unauthorised payment surcharge of 15% may also apply.

Upper earnings limit

UEL. The amount of pay at which employees stop paying the full rate of National Insurance contributions. The current limit can be found at Rates and allowances: National Insurance contributions

Variable time

The term used in respect of a permanent employee who is not contracted to work a set number of hours per week.


AA - annual allowance

AAC - annual allowance charge

AADP - application for adjudication of a disagreement procedure

ARCs - additional regular contributions (prior to 1 April 2014)

APCs - additional pension contributions (from 1 April 2014)

ARP - actuarially reduced pension

AVC - additional voluntary contribution(s)

BCE - benefit crystallisation event

CA - certified amount

CARE - career average revalued earnings

CAY - compensatory added years

CEP - contributions equivalent premium

CETV - cash equivalent transfer value

CLG - Communities and Local Government, now called Department for Levelling Up, Housing & Communities

COD - contracted out deduction

COEG - contracted-out employments group

COMBS - contracted-out mixed benefit scheme

COMPS - contracted-out money purchase scheme

COSRS - contracted-out salary related scheme

CPI - Consumer Prices Index

DLUHC - Department for Levelling Up, Housing & Communities

DWP - Department for Work & Pensions

EFRBS - employer financed retirement benefits schemes (from 6 April 2006)

EPSR - Employer Pension Scheme Reference. Our employer numbers start P9 followed by 5 numbers

FSAVC - free standing additional voluntary contribution

FTE - full-time equivalent

FURBS - funded unapproved retirement benefits scheme (prior to 6 April 2006), replaced by EFRBS

GAD - Government Actuary's Department

GMP - Guaranteed Minimum Pension

HMRC - HM Revenue & Customs

IDRP - internal dispute resolution procedure. Our appeal procedure is called application for adjudication of a disagreement procedure

IFA - inter-fund adjustment

IRMP - independent registered medical practitioner

ILA - individual lifetime allowance

LAC - lifetime allowance charge

LAEF - lifetime allowance enhancement factor

LEL - lower earnings limit

LGA - Local Government Association

LGE - local government employers

LGPC - Local Government Pension Committee

LGPS - Local Government Pension Scheme

LTA - lifetime allowance

MAPS - Money & Pensions Service

NAPF - National Association of Pension Funds, now called Pensions and Lifetime Savings Association

NI - National Insurance

NPA - normal pension age

NRA - normal retirement age

NRD - normal retirement date

PI - pensions increase

PIA - pension input amount

PIP - pension input period

PLSA - Pensions and Lifetime Savings Association

PSR - Pension Scheme Registry. Our PSR number is 10079128

QROPS - qualifying recognised overseas pension scheme

S2P - State Second Pension, also called Additional State Pension or SERPS

SCAVC - shared cost additional voluntary contributions

SCON - scheme contracting-out number. S2700144J for Derbyshire Pension Fund

SERPS - State Earnings Related Pension Scheme

SIP - statement of investment principles

SLA - standard lifetime allowance

SPa - State Pension age

TPAS - The Pensions Advisory Service, now replaced by Money & Pensions Service

TV - transfer value

UEL - upper earnings limit