Jargon Buster

Actively managed fund

A fund where an investment manager attempts to produce returns that are higher than the benchmark (such as the FTSE 100 Index). But there is also a risk that their returns could fail to match the benchmark. 

Annual Allowance

The total amount of contributions that can be paid to pension savings each tax year in the UK with the benefit of tax relief. This is £40,000 for the 2017/18 tax year. This includes any contributions made on your behalf (eg by your employer). For more information about tax and allowances go to the Limits on your savings section.

Annuity

An insurance policy you can buy when you retire using the money in your Personal Account. It pays an income for the rest of your life. You can find out more about annuities in the Retirement options section.

Company

Any company in the AXA Group of Companies in the UK that offers you membership of AXA UK Group Pension Scheme under your contract of employment.  

Defined benefit
A defined benefit pension scheme - sometimes called a final salary pension scheme - is one that pays out an income based on how much you earn when you retire. The defined benefit (DB) section of the AXA UK Pension Scheme is closed to new members. Existing members can no longer build up any benefits in this section, but they can take what they already had as a pension at retirement. 

 


Defined contribution

A defined contribution scheme is a type of retirement plan in which the employer, employee or both make regular contributions to an account. This account is then used to provide an income at retirement, through an annuity (pension) and/or a cash lump sum. All current employees of AXA UK are automatically enrolled to the defined contribution (DC) section of the Scheme. Contributions to your Personal Account vary depending which AXA Company you work for. 

Freechoice (’leave it to me’) investment option
One of the two investment strategies that you can choose from. This differs from the Lifecycle Strategy as you decide how much to invest in each of the available funds. If you invest using the Freechoice option, it is important that you regularly review your investment choices and make sure that these are right for your current circumstances. You can find out more about the Freechoice option here.

 

Income drawdown

Under income drawdown, each year you withdraw a retirement income from a pension arrangement and leave the rest invested. You have the flexibility to take out as much money as you like each year. You can find out more about drawdown in the Retirement options section.

Lifecycle Strategy (‘do it for me’) investment option

Under income drawdown, each year you withdraw a retirement income from a pension arrangement and leave the rest invested. You have the flexibility to take out as much money as you like each year. You can find out more about drawdown in the Retirement options section.

Lifetime Allowance

The maximum pension savings you can build up in all UK pension arrangements in a tax efficient manner. This is £1.03m for the 2018/19 tax year. For more information about tax and allowances go to the Limits on your savings section.

Passively managed fund

A fund where the investment manager aims to achieve a return that is close to a chosen benchmark, for example the FTSE 100. Passively manged funds are unlikely to do much worse than the benchmark, but neither will they outperform it by much. 

PaySmart

An arrangement whereby you agree to give up a part of your pay, equivalent to the employee contributions you would otherwise have paid to the Scheme. The Company then pays into the Scheme the amount of the contributions you would have paid. As your pay is reduced, you pay lower National Insurance contributions. 

Personal Account

The individual account that the Trustees set up in your name to which all contributions paid by or in respect of you are credited. The amount in your Personal Account will go up or down in line with the performance of your investment funds. 

Scheme

The AXA UK Group Pension Scheme constituted and established by a Trust Deed dated 23rd December 1941. 

Spouse

Your legally married wife or husband or civil partner. 

State Pension Age

The age at which State Pension benefits normally become payable. Your State Pension age will depend on your date of birth. For more information go to www.gov.uk/state-pension-age.

Target/Normal Retirement Age

Your default retirement age is 65. You can choose to retire at a different age, but you should think about the financial implications of this first. You can find out more here.

Trustees

The people who are responsible for managing the Scheme in the best interest of members.

Uncrystallised Funds Pension Lump Sum (UFPLS)

This is when you take money from your Personal Account as a cash lump sum payment. 25% is tax free and the rest of the cash is taxed as income (like your salary). You can find out more about your retirement options here.

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