Glossary of pension terms

Choose a letter below to jump to glossary terms beginning with that letter.

Data strategy

The Pensions Authority requires trustees of all pension schemes to have in place a data strategy. The data strategy (or policy) must consider the nature and scope of the data, how and when it is to be obtained and how it is to be checked for accuracy. Further details about the data strategy requirement can be found in the Authority’s Code of Practice for trustees.

DB financial risk measure 

Section 26K of the Pensions Act requires the Pensions Authority to have in place a monitoring tool that enables it to identify deteriorating financial conditions in a pension scheme and monitor how that deterioration is remedied. To this end, the Authority has developed a defined benefit (DB) financial risk measure. Trustees of DB schemes are required to provide the Authority with any information it requests in relation to the DB financial risk measure.

Declaration of trust

The type of trust document used when the employer is intending to act as sole trustee, but the actual content is comparable with the trust deed and rules. This type of document is commonly used when the assets of the pension scheme are totally invested and administered by an insurance company.

Deed of adherence

An additional trust document enabling a new employer to participate in an existing scheme.

Deed of appointment

A trust document by which a trustee is appointed.

Default investment strategy

An automatic investment strategy required by law to be applied under a personal retirement savings account (PRSA) contract unless the contributor indicates otherwise. The default investment strategy for each individual PRSA product is based on general good investment practice in saving for retirement and approved by the PRSA actuary. In relation to company or ‘occupational’ pension schemes, trustees of defined contribution (DC) schemes (or the DC element of a defined benefit scheme) may specify a particular investment strategy as a default (in the event that no investment selection is made by a member), if the trustees are offering members a choice of investment options.

Deferred benefit

Any retirement benefit, payment of which is delayed, e.g., until a person reaches normal pensionable age. Most often used to refer to pensions payable at retirement age which accrue to a scheme member on leaving service before retirement.

Deferred member

A pension scheme member who has left service with an entitlement to retirement benefits payable at a future date.

Deferred pensioner

A person entitled to a pension payment at a future date. Normally this would be an early leaver, but the term can also be used to describe someone whose retirement has been postponed.

Deferred retirement

Another term for when the normal date of retirement is postponed.


In a defined benefit scheme, any excess of the value of a scheme’s liabilities over the value of its assets as calculated by the actuary of the scheme.

Defined benefit scheme (also known as ‘final salary scheme’)

Defined benefit (DB) schemes provide members with retirement and death benefits based on predefined formulae set out in the rules of the scheme. Benefits are often based on a members’ salary close to retirement (or earlier death or leaving service) and on the length of time they have been a member of the scheme. For this reason, these schemes are sometimes known as ‘final salary’ schemes. However, DB schemes may also be ‘career average’ schemes in which the pension calculation is typically based on the member’s average earnings while a member of the scheme.

Defined contribution element of a defined benefit scheme

Members of defined benefit schemes can sometimes have their contributions or transfers treated as though they had been made under a defined contribution scheme.

Defined contribution scheme (also known as ‘money purchase plan’)

Defined contribution schemes provide retirement benefits based on the accumulated value of contributions paid to a pension scheme by or on behalf of a member, including the investment returns earned on those contributions less any charges. As such, it is the contributions that are ‘defined’ or known, as opposed to the benefits that the member will receive at retirement.

Definitive trust deed

The detailed trust deed governing a pension scheme which contains details of all the trustees’ powers. It is usually accompanied by the rules of the scheme.


A person who depends financially on a scheme member. Children are generally regarded as dependants until they reach the age of 18 or leave full-time education or vocational training, if later. A spouse/civil partner is always regarded as a dependant and a cohabiting partner is generally considered a dependant also. The definition of a dependant for any particular scheme is typically set out in the rules of the scheme.


A depositary is an institution that provides safe-keeping and oversight of assets. Trustees of pension schemes must arrange for the provision of these services in relation to pension scheme assets, either indirectly, e.g., via investment managers, or by the direct appointment of a depositary. The requirements with which trustees must comply in relation to depositaries are set out in chapter 3 of Part VIB of the Pensions Act.

Designated benefit

The part of a member’s retirement benefit which is allocated for payment to their former spouse/civil partner/qualified cohabitant or children under a pension adjustment order. See the Pensions Authority’s ‘Pensions on separation and divorce checklist’ available here.


A determination is a decision, subject to appeal, to conclude some form of dispute or question. In the context of pensions, determination can refer to one of three different scenarios:

  1. Provision is made, under the Pensions Act for the Pensions Authority to issue formal determinations in respect of certain questions specified in the Pensions Act.
  2. Decision of the trustees or other relevant person in an internal disputes’ resolution procedure.
  3. Final and binding ruling of the Financial Services and Pensions Ombudsman in a complaint or dispute, subject to appeal to the High Court.

Directly invested scheme

In the context of member participation in the selection of trustees of a pension scheme, a ‘directly invested scheme’ is a scheme whose assets are not invested exclusively in certain named categories of investment such as insurance policies, managed funds, cash deposits or unit trusts. Such pension schemes may become subject to the Occupational Pension Schemes (Member Participation in the Selection of Persons for Appointment as Trustees) (No. 3) Regulations, 1996, if they have more than 12 active members. This means that active and pensioner members of such schemes may potentially be involved in selecting trustees.

Disability ground

Discrimination by reference to disability is discrimination on the disability ground. Disability means total or partial absence of a person’s bodily or mental functions, including the absence of a part of a person’s body, the presence in the body of organisms causing or likely to cause chronic disease or illness, the malfunction, malformation or disfigurement of a part of a person’s body, a condition, or malfunction which results in a person learning differently from a person without the condition, or malfunction, or a condition illness or disease which affects a person’s thought processes, perception of reality, emotions or judgement or which results in disturbed behaviour. Disability includes a disability which exists at present, or which previously existed but no longer exists, or which may exist in the future, or which may be imputed to a person.


Disclosure means the giving out of information, either voluntarily or to be in compliance with legal regulations or workplace rules.

Disclosure of information regulations

The disclosure of information regulations are formally named the Occupational Pension Schemes (Disclosure of Information) Regulations, 2006, as amended and the Trust RACs (Disclosure of Information) Regulations, 2007, as amended. These regulations require specific information about pension schemes and trust RACs and their benefits to be disclosed to interested parties.


Cessation of contribution payments to a scheme, leading to its becoming paid up, or with a view to its winding-up.

Discontinuance valuation

Actuarial valuation conducted on the basis that the scheme is to be discontinued.

Discretionary increase

An increase in benefits which is awarded on a discretionary basis, usually at the discretion of the pension scheme trustees, as against one which is paid to members automatically under the scheme rules. Can be ad-hoc or regular in nature.

Discretionary powers

Powers conferred on the trustees or on the employer by the trust deed and rules of a pension scheme whereby issues (for example, the destination of death benefits) can be determined at their discretion.


Less favourable treatment of one person as against another in a comparable situation on a discriminatory ground regarding access to or membership of an occupational benefit scheme. Discrimination includes the issue of an instruction to discriminate.

Discriminatory grounds

Gender, family status, civil status, sexual orientation, religion, age, disability, race and traveller community membership are the discriminatory grounds. Discrimination on a discriminatory ground contrary to the principle of equal pension treatment is prohibited under Part VII of the Pensions Act.