GLOSSARY

Accrual rate

defines the rate at which pension benefits build up with service in a defined benefit retirement benefits scheme. For example, if the accrual rate is 2.4% per annum, a member that has 10 years of service will have build up a pension benefit of 24% of annual salary.

Accrued benefits

means the total benefits of a member of a retirement benefits scheme as determined by the Rules of the scheme and other parameters.

Active Member

means a member of a retirement benefits scheme who is contributing to that scheme.

Actuarial assumptions

means the set of assumptions made by the actuary as to rates of return, inflation, increase in earnings, mortality, etc, which form the basis of an actuarial valuation or other actuarial calculation.

Actuarial valuation

means an analysis made by an actuary of the assets and liabilities of a retirement benefits scheme based on actuarial assumptions.

Actuary

means a professional trained to determine the solvency of a retirement benefits scheme through an actuarial valuation.

Administrator

means a person licensed by URBRA, and appointed by trustees to administer a retirement benefits scheme.

Annuitant

means a person who is receiving an annuity.

Annuity

means a schedule of fixed or variable payments for the life of a person or for a specified period of time.

Asset Allocation

is the spread of fund investments among different asset classes.

Asset

means the any property of a retirement benefits scheme including: investments, securities, shares, cash, real estate and other forms of ownership.

Auditor

means an individual or firm approved by URBRA, and appointed by the trustees of a retirement benefits scheme to examine and report on the financial statements of the scheme.

Auxiliary benefits

mean benefits that are provided under a retirement benefits scheme in addition to the pension benefits, such as survivor benefits and invalidity benefits.

Benefit statement

means a statement of the benefit entitlements of a member or beneficiary of a retirement benefits scheme.

Board of Trustee

means the governing body of a retirement benefits scheme, which is ultimately responsible for managing the scheme with the overriding objective of providing a secure source of retirement income.

Buy-out

means the purchase of an annuity for a member of a retirement benefits scheme that will guarantee the same benefits as that of the scheme.

Commutation factor

defines the relationship between a lump sum payment received and the future income stream foregone.

Contribution holiday

means a period when the contributions to a retirement benefits scheme are suspended due to the scheme being overfunded.

Contribution rate

means an amount (usually expressed as a percentage of the contribution base) that is needed to be paid into the Retirement Benefits Scheme

Contributory scheme

means a retirement benefits scheme that requires the employer and/or the members to contribute to the scheme.

Corporate trustee

means a legal entity licensed by URBRA to perform the functions of a trustee of a retirement benefits scheme.

Custodain

means a Financial Institution licensed by URBRA, and appointed by the trustees for the safe custody of the funds, securities, financial instruments and documents of title of the assets of a retirement benefits scheme.

Deferred annuity

means an annuity which commences at a future date.

Deferred benefit

means a benefit whose payment commences at a future date.

Deferred member

mean a member of a retirement benefits scheme who no longer contributes to or accrues benefits from the scheme, but has not yet received benefits.

Defined benefits (DB) Scheme

means a retirement benefits scheme where the benefits in the scheme rules are defined according to a formula related to members’ earnings, length of service and other parameters.

Defined contribution (DC) scheme

means a retirement benefits scheme in which a member’s benefits are determined by the contributions paid into the scheme in respect of that member, and any investment returns.

Early Retirement

refers to the circumstances when an individual decides to retire earlier and draw the pension benefits earlier than their normal retirement age.

EET System

means a form of taxation of retirement benefits schemes where contributions, investment income and capital gains are exempt from tax, and the benefits are taxed.

TET System

means a form of taxation of retirement benefits schemes where contributions and benefits are exempt from tax, and investment income and capital gains are taxed.

Fund manager

is a person licensed by URBRA, and appointed by trustees to advise and invest the assets of a retirement benefits scheme in accordance with the investment policy statement of the scheme.

Funding level

determines whether a scheme is solvent or not and is determined by expressing the actuarial value of a schemes assets to the actuarial value of that schemes liabilities.

Guaranteed annuity

means an annuity that is paid for a minimum period of time regardless of whether the annuitant is alive or not.

Hedging

means an investment strategy aimed at reducing potential investment losses.

Incapacity

means the inability to continue working due to ill health or disability.

Independent trustee

means an individual licensed by URBRA and a member of the board of trustees that is independent from the retirement benefits scheme, the members, the employer(s) and the service providers to the scheme.

Indexation

means the method with which retirement benefits are adjusted to take into account changes in the cost of living (e.g. price and wage inflation).

Irrevocable trust

means a trust created for the benefit of designated beneficiaries which shall not be revoked or canceled after its creation.

Liabilities

mean the obligations of a retirement benefits scheme towards the members and beneficiaries.

Liquidation

means the insolvency of a retirement benefits scheme where the scheme is wound up, the assets of the scheme are realized, and the proceeds distributed amongst the members and creditors in a prescribed way.

Mandatory contribution

means the level of contribution that an employer and employee are obliged by law to contribute to a retirement benefit scheme.

Member

means a person who is admitted to the membership of a retirement benefits scheme.

Non-contributory scheme

means a retirement benefits scheme where the employer is liable for all benefits under the scheme.

Occupational retirement benefits Scheme

means a scheme established by an employer or a group of employers for the benefit of their employees.

Pensionable earnings/salary

means the earnings/salary on which benefits and/or contributions are calculated.

Pensioner

means a member who has retired and is entitled to receive pension.

Portability

means the ability of a member to transfer his or her accrued benefits from one retirement benefits scheme to another.

Retirement benefits scheme

means any legal arrangement created for the purpose of providing retirement benefits in the form of annuities or a lump sums payable upon retirement, death, termination of service or upon the occurrence of a specified event.

Retirement date

means the date on which a member becomes entitled to retirement benefits in terms of the rules of the retirement benefits scheme.

Scheme Rules

means the rules governing the constitution, administration and management of a retirement benefits scheme.

TEE System

means a form of taxation of retirement benefits schemes whereby contributions are taxed, and investment income, capital gains and benefits are exempt from tax.

Trsust deed

refers to the legal document/instrument which establishes the legal entity of the retirement benefits scheme.

Trust

means an arrangement under which a person or a group of people (trustees) hold and look after property on behalf of others.

Trustee

means an individual licensed by URBRA and a member of the board of trustees.

Umbrella scheme

means a retirement benefits scheme which is established for the purpose of providing benefits to an individual or group of individuals, employees of a body corporate, members of an association or a professional body, or employees of a single employer or a group of employers, and admission to membership is not restricted.

Whistle blower

means a person who reports a breach of the law to the relevant authorities.