Glossary of pension terms

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

Late retirement

The retirement of a member, with immediate retirement benefit, after normal retirement age. The benefit may be increased because of later payment.

Letters of exchange

A method of setting up a pension scheme for a single employee. The letter itself must include all the rules and powers usually contained in a trust deed and rules and must make reference to the irrevocable nature of the pension scheme in order to receive Revenue approval.


The obligations of a pension scheme to pay amounts of money either immediately or in the future. Liabilities whose payment is dependent on unpredictable future events (such as the death of a member) are called ‘contingent liabilities’.

Life assurance scheme

A scheme which provides only a benefit payable on the death of a member whilst in service.

Long service benefit

The benefits that would be payable to a member of a pension scheme on the assumption that they remain in relevant employment until normal pensionable age (NPA). Long service benefit may take the form of regular pension payments and/or a lump sum and includes any benefits payable on the death of a member after NPA to the member’s spouse/civil partner or dependants.