Jargon buster

Additional Voluntary Contributions (AVCs) Extra payments that you can make on top of your ordinary Plan contributions to provide extra pension under the Plan.
Annual Allowance The maximum increase in pension savings that can be built up in any one tax year by you without incurring a tax charge. The Annual Allowance (AA) is increased annually and from 6 April 2016, the standard AA is £40,000 for pension inputs for the tax year from 6 April 2016 to 6 April 2017.
Basic Pay Basic salary or wage excluding overtime, bonuses, directors' fees, shares of profits, repayment of expenses and any other fluctuating work-related pay. If you participate in SMART Pensions, your Basic Pay includes the amount your basic salary or wage has been reduced as a result of you participating in SMART Pensions.
Basic Pension The formula used to work out your main pension entitlement from the Plan.
accrual rate x Final Pensionable Pay x Pensionable Service = Basic Pension

The accrual rate is:

  • 1/60th for Pensionable Service prior to 1 June 2009.
  • 1/60th or 1/70th for Pensionable Service from 1 June 2009.

You may also be entitled to a Special Additional Pension (SAP) payable from age 65.

Basic State Pension This is a set amount available from State Pension Age (SPA) to everyone who has paid sufficient National Insurance contributions during their working lifetime.
Civil Partner The person with whom you have entered into a civil partnership.
Company IBC Vehicles Limited
Eligible Child Includes a child of the deceased Member, an adopted child, a legitimate child and (when born) a child who was conceived but not born on or before the date upon which the Member dies but does not include an illegitimate child or a child otherwise treated by the Member as one of his family of children unless the Trustee in its absolute discretion and in relation to a particular child otherwise determines.
Final LEL Pay The annual average of the Lower Earnings Limit received in the last five years of Pensionable Service but not less than if it had been calculated as at 31 May 2009, using the best continuous 24 months out of the last five years of Pensionable Service prior to 1 June 2009.
Final Pensionable Pay The average of your Pensionable Pay received in the last five years of Pensionable Service but not any less than if it had been calculated as at 31 May 2009 using the best continuous 24 months out of the last five years' Pensionable Service.
Guaranteed Minimum Pension (GMP) The part of your pension which relates to contracting out of the State Earnings Related Pension Scheme (SERPS) before 6 April 1997.
Lifetime Allowance The maximum pension savings that can be built up by you until you retire without incurring a tax charge. From 6 April 2016, the Lifetime Allowance is £1 million.
Lower Earnings Limit (LEL) The amount set by the State which is used in the calculation of National Insurance contributions. The annual amount of the LEL for the tax year ending 5 April 2011 is £5,044.
Normal Retirement Date (NRD) The first day of the month immediately following your 65th birthday. This can be brought forward to as early as age 62.
Old Fund The Vauxhall & Associated Companies Pension Fund.
Pensionable Pay
  1. Basic Pay less the Lower Earnings Limit.
  2. From 1 June 2009, increases to Pensionable Pay are capped at the Retail Prices Index on an annual basis. Exceptions can be made for major promotions, as determined by the Principal Company. Pensionable Pay may decrease on major demotions unless the Principal Company determines otherwise.
  3. If you joined after 31 May 2009, your Pensionable Pay for the first pay year is determined by the Principal Company as either:
    (a) Option 1 - what the Principal Company determines it would have been had you been a member in Pensionable Service on 31 May 2009; or
    (b) Option 2 - such amount as the Principal Company otherwise determines.
  4. For second and subsequent pay years, paragraph 2 above applies.
Pensionable Service Your service as a member of the Plan. This is normally continuous Company service in respect of which you have contributed to the Plan, but some members are granted extra Pensionable Service in exchange for a transfer payment from another scheme.

If you work part-time, your Pensionable Service during your period of part-time working is rated down proportionately, but for benefit purposes your Final Pensionable Pay and Pensionable Pay are calculated as if you were working full-time. For contribution purposes your Pensionable Pay is calculated as what it would have been if you were working full-time and is then rated down proportionately.
Plan The IBC Plan
Qualifying Service Your service as a member of the Plan.
Spouse The person to whom you are married.
Special Additional Pension (SAP) This benefit is payable to all employees who were members of the Old Fund on 31 July 1988 who transferred on 1 August 1988 to the Plan, irrespective of the Tier of contribution selected. The benefit is calculated as follows:

Pre-1 August 1988 Pensionable Service
Pensionable Service up to 1 August 1988 x 1/60 x 25% x Final LEL Pay


From 1 August 1988 Pensionable Service
In addition to any SAP related to your pre-1 August 1988 Pensionable Service, you receive a SAP related to your contribution Tier as follows:
  • BASIC TIER: No SAP is payable
  • MIDDLE TIER:
    Pensionable Service on or after 1 August 1988 x Accrual Rate x 25% x Final LEL Pay
  • TOP TIER:
    Pensionable Service on or after 1 August 1988 x Accrual Rate x Final LEL Pay
The accrual rate is:
  • 1/60th for Pensionable Service prior to 1 June 2009.
  • 1/60th or 1/70th for Pensionable Service from 1 June 2009.
Your SAP is calculated in proportion to the period each Tier of contribution was paid.
State Pension Age (SPA) The age at which your State Pension becomes payable. If you are a man this is between age 65 and 68 and if you are a woman this is between 60 and 68, depending on your date of birth.
Tier The level at which you make contributions and receive benefits from the Plan.
Top-up Pension Additional pension paid to you by the Plan if you joined the Plan before 6 April 1997 and retire before your State Pension Age and with Company consent.

The Top-up Pension ceased to accrue from 1 June 2009 and is calculated as follows:

Top-up pension per year = Pensionable Service prior to 1 June 2009 (maximum of 30 years) x £46
Trustee IBC Pension Trustees Limited.

The Pensions Department
AW House
6-8 Stuart Street
Luton
Beds
LU1 2SJ

Telephone:
01582 282956 or
01582 282957

Email:
team@thepensiondepartment.co.uk