Hampshire Pension Services

Administering the Local Government Pension Scheme, Police and Fire schemes

Hampshire Pension Fund

Use our A - Z to beat the jargon

A - Z of acronyms



An LGPS pension that is in payment may be reduced if the pensioner starts a new employment where they are eligible to join the LGPS.  

Accrual Rate

The rate at which a pension benefits build up for each year and part year of membership.

Active Member

An employee who contributes to the LGPS through their pay.

Actual Service

The length of time during which you contributed to the LGPS. It is the calendar length of time in years and days, and is used to assess your entitlement to receive benefits. It may also include any service transferred into the LGPS from another scheme and in some cases previous part-time or non contributory service.

Actuarial Increase

The amount by which a member’s pension and lump sum are increased if the member retires after normal retirement age.

Actuarial reduction (also called percentage reduction)

The amount by which a member’s pension and lump sum are reduced if they are paid out before normal retirement age.

Actuarial Valuation

LGPS regulations require a full valuation be carried out on the Hampshire Pension Fund every three years. This is to ensure the fund can meet its liabilities to members and pensioners. The valuation also determines contribution rates for employers. Also known as the valuation or triennial valuation.


An expert on pension scheme assets and liabilities, and life expectancy and probabilities for insurance purposes. The fund actuary works out whether money paid into the Hampshire Pension Fund is enough to pay pensions when they are due. The fund valuation is carried out by the actuary.

Added Years

Additional LGPS membership bought by an employee or employer. Added years were withdrawn on 1 April 2008, although existing contracts remain valid.

Additional Regular Contributions (ARCs)

Extra contributions paid into the LGPS to buy extra yearly pension. You can buy extra pension in multiples of £250, up to a maximum of £5000. The amount you pay is worked out according to guidance issued by the Government Actuary’s Department (GAD).

Additional Voluntary Contributions (AVCs)

Payments made to an approved provider, normally an assurance company, to provide extra pension benefits. AVCs can be free-standing or in-house. The Hampshire Pension Fund offers an in-house AVC scheme.

Administering Authority

The LGPS is a national scheme administered at a local level by 89 administering authorities. Hampshire County Council is the Administering Authority for Hampshire Pension Fund. It is responsible for administration and investment of member and employer contributions.

Administering authority discretions

The power that the Hampshire Pension Fund has to make decisions in certain situations.

Admission Agreement

An agreement between the administering authority, a scheme employer and a contracted company by which the contractor becomes part of the LGPS, known as a transferee admission agreement. An admission agreement can also be between the administering authority and an employer so that the employer becomes part of the LGPS, known as a community admission agreement.

Admitted/Admission Body

An employer who participates in the LGPS under an admission agreement that provides access to the scheme for some or all of its employees. Private sector companies with contracts for public services generally have a right to be admitted to the LGPS and are known as transferee admission bodies. Voluntary, charitable and not-for-profit organisations may only join at the pension fund’s discretion and are known as community admission bodies.

Annual Allowance (AA)

The amount by which the value of your pension benefits may increase in any one year (except the year that all your benefits become payable) without having to pay income tax at 40% on the excess. It is set by HM Revenue and Customs.


A contract usually sold by an insurance company used to make payments to the holder at specified intervals, usually after retirement.


Items held by the pension fund such as shares and property that are used to generate income.

Augmentation Costs

The costs to an employer of granting a member additional periods of membership in the LGPS.

Augmented Membership

Extra membership granted at the discretion of the employer.

Authorised Payments

Payments that a pension scheme is allowed to make. Unauthorised payments are subject to a penalty tax charge.




A person who has, or will have, an entitlement to benefits under the rules of the LGPS, when specific events occur.

Benefit Crystallisation Event (BCE)

An HM Revenue and Customs term for when benefits from your pension come into payment. When a BCE occurs, benefits received must be tested against the Lifetime Allowance (LTA). If exceeded, a tax charge will be imposed on the excess



Cash Equivalent Transfer Value (CETV)

The capital value of a member’s pension benefits. The calculation is used during divorce or dissolution of a civil partnership or to transfer benefits out of the LGPS into another pension scheme.

Casual Employee

A member of staff employed to work on an ‘as and when required’ basis, with no fixed days or hours. There is no expectation of ongoing work, so employees can refuse a work opportunity at any time. Most casual employees cannot join the LGPS.

Certified Amount

The employee’s part of the Contributions Equivalent Premium (CEP), which is recovered by the Hampshire Pension Fund if a person receives a refund of pension contributions.

Civil Partnership

A civil partnership is a relationship between two people of the same sex formed when they register as civil partners of each other. The civil partner of a member who paid into the LGPS on or after 1 April 2008 will be eligible to receive a surviving partner’s pension if the member dies.


An arrangement between two people (of opposite or the same sex) who live together on a long-term, permanent basis without being married or in a civil partnership. An LGPS member may nominate their cohabiting partner to receive a surviving partner’s pension if they meet certain conditions.


When you retire, you can choose to exchange some of your yearly pension for a tax-free lump sum. This is called commutation. In the LGPS every £1 of pension that you commute will increase your lump sum by £12.

Compensatory Added Years (CAY)

Extra LGPS membership granted by an employer to an employee who was made redundant or retired on efficiency grounds. Employers can no longer grant CAYs as they were replaced by augmented membership in 2006

Consumer Price Index (CPI)

Measures change in our cost of living, based on the costs of consumer goods and services, such as food and utilities. Deferred LGPS pensions and most pensions in payment are index-linked to the CPI. See also pensions increase.


The LGPS is contracted-out of the State Second Pension Scheme (S2P). While you pay into the LGPS you will not build up benefits in S2P. When you retire you will not receive S2P relating to periods of LGPS membership.  You may pay less National Insurance. The LGPS is guaranteed to pay at least as much as S2P.


Money paid into a pension scheme by members and employers that goes towards your pension benefits. Employee contributions are a percentage your gross pay and are shown on your pay slip.

Contributions Equivalent Premium (CEP)

A payment to the State Second Pension Scheme (S2P). It is used to reinstate a member into SP2 after they have been contracted out, for example after they paid into the LGPS.



Death Grant ‘Expression of Wish’ Form

A form members can complete to tell us who you would like to receive any lump sum death grant, in the event of death. The Hampshire Pension Fund has absolute discretion as to the distribution of death grants but will have the greatest regard for the wishes stated on the form.

Deferred Benefits (may also be called Preserved Benefits)

A pension benefit that a member or employer has stopped paying in to. It is kept in the LGPS until it is paid upon retirement or is transferred out of the scheme.

Deferred Member (may also be called Preserved Member)

A member of the LGPS who no longer contributes to the scheme but has pension benefits that can be paid on retirement or transferred out of the scheme.

Defined Benefit Scheme

A pension scheme where pension benefits are defined by regulation and do not depend on contributions paid or on how well contributions are invested. The LGPS is a defined benefit scheme.

Department for Communities and Local Government (DCLG)

The Government department responsible for policy development, the regulatory framework and statutory appeal arrangements for the LGPS in England and Wales, as well as advice on broader pension policy issues affecting the scheme (formerly known as Office of the Deputy Prime Minister (ODPM).

Department for Work and Pensions (DWP)

The Government department responsible for the State Pension and other welfare benefits and services.


A person who is financially reliant on a member of the LGPS.

Designating Body

An employer who has the power to decide if an employee or group of employees can join the LGPS and pass a resolution accordingly. Town and parish councils are designating bodies. Also known as resolution bodies.


The power that the Hampshire Pension Fund and each employer has to make decisions in certain situations. When either the pension fund or the employer does not have discretion they must follow LGPS regulations.



Early Retirement

A member who retires before normal retirement age and receives immediate pension benefits. It can happen in different circumstances – some meaning that benefits may be reduced due to early payment.


A court order from a judge, for former partners of a marriage or civil partnership to share the pension rights built up before a divorce or dissolution of a partnership, at the time of the original member’s retirement.

Eligible Children

Children who would be entitled to pension benefits on your death. They must, at the date of your death:

  • be under 18 and be wholly or mainly dependant on you, or
  • be aged 18 or over and under 23, be dependent on you, and be in full-time education or undertaking vocational training (although a dependant child who commences full time education or vocational training after the date of your death may be treated as an eligible child up to age 23), or
  • in some cases, a dependant child of any age who is disabled .
  • in all cases, the children must have been born before or within a year of your death.

Eligible Councillor

A councillor or an elected mayor (other than the Mayor of London) who is eligible for membership of the LGPS.

Employer Contracting-Out Number (ECON)

The HM Revenue and Customs reference number allocated to employers who operate a contracted-out pension scheme for their employees.

Employer discretions

The power an employer has to choose how they will treat certain situations. To use its discretion, an employer must have a discretions policy statement.

Employer discretions policy statement

Sets out the policies that an employer has resolved to follow in exercising its discretions under the LGPS. The employer must keep the policy under review, publish it and provide a copy to Pensions Services.



Final Pay

Normally pensionable pay in the year up to retiring, ceasing employment or opting out, but earlier years may be used. If you work part-time, it is the pay you would have received had you worked whole-time. Final pay is used to calculate pension benefits. It will probably differ from your rate of pay on leaving because most members’ pay changes in their last year.

Flexible Retirement

Flexible retirement is the option to draw your retirement benefits while you are still working in exchange for reducing your hours and/or grade. You must be age 55 years or over and have your employer’s consent to do this.   

Free Standing Additional Voluntary Contributions (FSAVCs)

Extra contributions paid to a provider of the member's choice and not to the approved in-house AVC scheme provider.

Funding Level

A comparison of a scheme’s assets and liabilities.



Gainful Employment

A term used in assessing eligibility for ill health retirement defined as paid employment for not less than 30 hours in each week for a period of not less than 12 months.

Guaranteed Minimum Pension (GMP)

The minimum pension the LGPS is guaranteed to pay you for the period you were a member of the Scheme between 6 April 1978 and 5 April 1997. It is at least as much as you would have earned on the State Earning Related Pension Scheme at that time.



HM Revenue and Customs (HMRC)

The Government department responsible for taxation and payment of certain benefits such as Tax Credit, formerly called the Inland Revenue.



Ill Health Retirement

When a member of the scheme is retired on medical grounds before the normal retirement age.

In house Additional Voluntary Contributions

A member may choose to make Additional Voluntary Contributions that are deducted from their wages and paid to the Hampshire Pension Fund’s approved provider.


A transfer of a member’s pension rights from a previous local government employment to a new employment with a different local government authority.

Internal Disputes Resolution Procedure (IDRP)

A complaints procedure governed by regulation that allows current or former members to settle any dispute or complaint they may have in respect of any decision made about their entitlements under LGPS rules.







Late Retirement

A member can work beyond normal retirement age. The pension can be paid when a member leaves employment, takes flexible retirement or reaches age 75. See actuarial increase.


The total expected value of future pension payments from the Fund to its members.

Lifetime Allowance (LTA)

The capital value of all of a person’s pension rights (not only with the Hampshire Pension Fund) will be tested against a single Lifetime Allowance (LTA) each time they take pension benefits. If the total is more than the LTA (or any primary Lifetime Allowance protection, unless you have enhanced protection) extra tax will be due on the excess. The Lifetime Allowance does not include any state retirement pension, state pension credit or any spouse’s, civil partner’s or dependant’s pension. The LTA is set by HM Revenue and Customs and for 2012/2013 is £1.5million.

Local Government

A term for bodies that govern territorial areas smaller than the state, including municipal corporations, such as county, city, town, and parish councils.

Local Government Pension Scheme (LGPS)

A funded, defined benefit occupational pension scheme open to eligible employees of local government organisations such as councils, police and fire civilian staff and non teaching employees in further and higher education institutions.

Lower Earnings Limit

The amount of pay that you can receive before you pay any National Insurance contributions.




A person who has or is contributing to the LGPS.


Number of years and days you have been a member of the LGPS and any membership transferred from another scheme. It also includes any membership bought with additional contributions. For part-time employees, it is the appropriate proportion of full-time membership. Also called pensionable service.



Nominated cohabiting partner

A person who will receive a cohabiting partner’s pension in the event of a member’s death. To nominate a cohabiting partner of either opposite or same sex, your relationship has to meet certain conditions and a joint declaration must be signed.

Normal Retirement Age

Usually a member’s 65th birthday, unless a member has service as a councillor, coroner or justices' clerk. Retirement may be earlier or later than age 65.



Occupational Pension Scheme

A pension scheme to which employees of an organisation or group of organisations may contribute. Once an employee leaves the employer, they cannot pay into the scheme. The LGPS is an occupational pension scheme.



Part Time

You are part-time if you work less than your employer’s standard whole-time hours. Your LGPS membership will reflect this.

Pension Sharing

Division of a member’s benefits upon divorce or dissolution of a civil partnership.

Pensions Ombudsman

The Pensions Ombudsman investigates complaints and settles disputes between scheme administrators and scheme members. Pension schemes must follow the Ombudsman’s rulings, but can challenge the rulings in court if they wish. See also

Pensionable Pay

The wages on which you pay pension contributions. It includes normal pay, shift allowances, bonuses, contractual overtime, statutory sick pay and other items that your employer deems pensionable, if not precluded by LGPS regulations. If you work part-time, the figure used to work out your pension benefits is the pay you would receive if you worked full-time.

Pensionable Service

Service used to calculate pension benefits including that built up whilst a member of the LGPS and any service transferred from another pension scheme. It also includes any service bought with additional contributions. For part-time employees, it is the appropriate proportion of full-time service. Service is calculated in years and days. Also called membership.

Pensions Increase

LGPS benefits are increased in line with inflation, following a yearly review by HM Treasury. Deferred LGPS pensions and most pensions in payment receive pensions increase. There are pensions increase tables on the HM Treasury website. See also Consumer Price Index.

Personal Pension

A pension purchased from a financial services company, such as an insurance company, bank, investment company or building society.

Policy Statement

A statement setting out the policies that the administering authority or an employer has resolved to follow in exercising certain discretions under the LGPS. You should be notified of the policies contained on the Statement and, where changes are made, you should be notified within one month of the change occurring.



Qualifying Service

LGPS service from a previous employment, which has not been transferred to the new employment but still gives the member extra benefits , such as meeting membership dependant criteria like the 85 year rule. The service does not count towards pension benefits built up in the new employment.




The pay you receive in your employment. Pensionable remuneration is the pay from which you make pension contributions.

Resolution Body

An employer who has the power to decide if an employee or group of employees can join the LGPS and pass a resolution accordingly. Town and parish councils are resolution bodies. Also known as designating bodies.

Retired member

A member whose pension is in payment following retirement.



Scheduled Body

An employer who is either statutorily obliged to join the LGPS or, in the case of parish councils, has a statutory right to do so.

Scheme contracted-out number (SCON)

The HM Revenue and Customs reference number allocated to contracted-out  pension schemes.

State Earnings Related Pension Scheme (SERPS)

The earnings-related part of the state pension that employed people could earn until  5 April 2002. LGPS members were contracted-out of SERPS, and most paid less National Insurance. The State Second Pension (S2P) replaced SERPS from 6 April 2002.

State Retirement Age (SRA)

The age that you can draw your state pension. Currently age 65 for men and 60 for women. Between 2010 and 2020, the SRA will be equalised at age 65. Also called the State Pensionable Age.

State Second Pension (S2P)

Replaced the State Earnings Related Pension Scheme (SERPS). It provides workers with extra pension benefits. The LGPS is contracted-out of S2P.



The 85 Year Rule

Applies only to members with LGPS membership before 1 October 2006. If you choose to take your benefits between age 60 and 65, they will be reduced unless your length of membership and age (both in whole years) when added together equals 85 or more. The rule is not relevant to redundancy, efficiency or ill health retirements because such pensions are not reduced.

The Pensions Advisory Service (TPAS)

TPAS provides information and guidance on all areas of pensions. They also help the public with problems, complaints or disputes with occupational or private pensions. They are an independent, non-profit organisation.

Total Membership

The amount of membership used to work out your pension benefits.

Transfer value

A cash sum that represents the value of your pension rights. See cash equivalent transfer value.

Transferred Service

Pension transferred into the LGPS from a previous pension scheme that now counts towards your LGPS membership.

Triennial valuation

LGPS regulations require a full valuation to be carried out on the Hampshire Pension Fund every three years. This is to ensure the fund can meet its liabilities to members and pensioners. The valuation also determines contribution rates for employers. Also known as the actuarial valuation or valuation.



Upper Accruals Point

The amount of pay beyond which you cease to pay the lower, contracted-out rate of national insurance contributions.




LGPS Regulations require a full valuation be carried out on the Hampshire Pension Fund every three years. This is to ensure the fund can meet its liabilities to members and pensioners. The valuation also determines contribution rates for employers. Also known as triennial valuation.











  • AAC - Annual Allowance Charge
  • ACT - Advance Corporation Tax
  • AVC - Additional Voluntary Contribution
  • ARC - Additional Regular Contribution
  • BCE - Benefit Crystallisation Event
  • CA - Certified Amount
  • CAY - Compensatory Added Years
  • CEP - Contributions Equivalent Premium
  • CETV - Cash Equivalent Transfer Value
  • CLG - Communities and Local Government (Department of)
  • CPI - Consumer Price Index
  • DWP - Department of Work & Pensions
  • ECON - Employer Contracting-Out Number
  • FSAVC - Free Standing Additional Voluntary Contribution
  • GAD - Government Actuary's Department
  • GMP - Guaranteed Minimum Pension
  • HMRC - Her Majesty's Revenue & Customs
  • IDRP - Internal Disputes Resolution Procedure
  • IFA - Independent Financial Advisor
  • ILA - Individual Lifetime Allowance
  • LTA - Lifetime Allowance
  • LGPS - Local Government Pension Scheme
  • NAPF - National Association of Pension Funds
  • NRA - Normal Retirement Age
  • NRD - Normal Retirement Date
  • PI - Pensions Increase
  • S2P - State Second Pension
  • SERPS - State Earnings Related Pension Scheme
  • SIP - Statement of Investment Principles
  • SLA - Standard Lifetime Allowance
  • SPA - State Pension Age
  • TPAS - The Pensions Advisory Service (formerly OPAS)
  • TV - Transfer Value

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