Glossary of pension terms

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Scheme, as defined in the Pensions Act, means an occupational pension scheme.

Scheme year

A period in relation to a pension scheme for the purposes of the annual report and accounts. It may be any year beginning on:

(a) a date specified in the scheme documents,

(b) 1 January, or

(c) such other date as may be agreed between the trustees and the Pensions Authority.

The trustee annual report and accounts of a pension scheme usually relate to a period of 12 months, however in certain circumstances they can relate to a longer period not exceeding 23 months.

Section 50 order

An instruction given to the trustees of a scheme by the Pensions Authority, pursuant to section 50 of the Pensions Act, to reduce the promised benefits under the scheme so that the funding standard provisions of the Pensions Act can be met.


The investment of the pension scheme’s assets in the business of:

  • the employer, or
  • that of an associated employer, or
  • any director or shadow director of the employer or an associated employer.

It also includes loans made to such bodies out of the pension scheme assets. Self-investment is regulated under both the disclosure and funding standard provisions of the Pensions Act.

Service provider

A service provider, in relation to a pension scheme, is an individual or entity that carries out a key function, the management or any other activity on behalf of the trustees, e.g., administration, investment and legal services. See also Outsourcing.

Sexual orientation ground

The sexual orientation ground is one of nine discriminatory grounds listed in the Pensions Act. The Pensions Act prohibits discrimination of people on the ground of sexual orientation in any rule of an occupational benefit scheme. Sexual orientation means heterosexual, homosexual or bisexual orientation.

Small scheme

A pension scheme with less than 100 active and deferred members (not including pensioners). The distinction between ‘small’ and other sized group schemes was relevant prior to 2023 in terms of trustee obligations. However, from 2023 trustee obligations are the same for both types of group scheme.

Small self-administered pension scheme (SSAP)

A Revenue term which means a self-administered pension scheme (SSAPP) with less than 12 members or a scheme designed primarily for ‘20% Directors’ (i.e., a director of the sponsoring employer who at any time in the last three years has owned or controlled more than 20% of the voting rights in the company or its parent). SSAPs are occupational pension schemes that are subject to the requirements of the Pensions Act. Special conditions attach to the approval by Revenue of SSAPs. These include the requirement to appoint a Revenue approved pensioneer trustee as well as Revenue restrictions on SSAP investments aimed at preventing types of self-investment. Further information can be found in the Revenue Pensions Manual.

Sovereign annuity

An annuity linked to sovereign bonds issued by Member States of the European Union. The annuity payments may be reduced if underlying reference sovereign bonds default.

Standard arrangement

The ‘standard arrangement’ is one of the methods set out in regulations by which active and pensioner members of certain pension schemes can participate with the employer in the selection of trustees. It typically involves members selecting trustees from among their own nominees by means of an election. For more information, please refer to the Pensions Authority’s guide ‘Member participation in the selection of trustees’, available here. For more detailed information about the legislation governing the process, please see the Pensions Authority’s guidance notes on ‘Member participation in the selection of persons for appointment as trustees’, available here. See also ‘alternative arrangement’.

Standard PRSA

A standard personal retirement savings account (PRSA) can only invest in pooled funds except for temporary cash holdings. There is a maximum charge of 5% on each contribution you pay and a maximum 1% annual fund management charge, based on your fund value.

Statement of investment governance

Trustees of pension schemes must prepare and maintain a written statement outlining the governance process used when deciding the pension scheme’s investment objectives and investment strategy. Trustees must consider this statement when appointing or reviewing any investment service provider, or when making decisions in relation to the investment of pension scheme assets. The statement of investment governance must be made available to members on request. Further information can be found in the Pensions Authority’s Code of Practice for trustees.

Statement of investment policy principles (SIPP)

A written statement prepared and reviewed at least every three years by the trustees of a pension scheme that includes:

  • the investment objectives of the trustees,
  • the investment risk measurement methods,
  • the risk management processes to be used,
  • the strategic asset allocation, and
  • information on how the investment policy takes into account environmental, social and governance factors.

The statement should be written in a clear and comprehensible manner, avoid the use of jargon or technical terms where everyday terms can be used instead and be presented in a way that is easy to read.

Statement of reasonable projection (SORP)

A statement projecting the possible future worth of a defined contribution (DC) retirement fund, which is based on assumptions about future contributions paid, investment returns on those contributions, and the cost of buying an annuity (pension) when a member retires. SORPs should be used as a guide in assessing whether or not an individual is on track to meet their retirement savings goals.

SORPs are issued annually to PRSA contributors, and members of DC schemes until 2023/2024 (for DC schemes, SORP requirements continue to apply until trustees issue the first pension benefit statement to members in accordance with new legislation and the assumptions set by the Pensions Authority).

Statutory guidance

Statutory guidance is issued by the Pensions Authority and prescribed by the Minister for Social Protection under regulations. Statutory guidance has the force of law and should be read in conjunction with the provisions of the Pensions Act and regulations made thereunder to which it relates. Statutory guidance issued by the Pensions Authority to date can be found here.

Statutory scheme

A scheme whose operation is governed either by an Act of the Oireachtas or by regulations made under a statutory instrument in pursuance of such an Act.


The Pensions Authority may require a pension scheme to conduct a ‘stress-test’ for the purposes of identifying deteriorating financial conditions and monitoring how that deterioration is remedied. Such a stress-test would assess a pension scheme’s ability to identify possible future adverse economic scenarios and the ability of the pension scheme to withstand those possible adverse economic scenarios. See section 26L of the Pensions Act.

Separately, EIOPA conducts a stress test exercise every three years. Larger Irish pension schemes are required to participate in the EIOPA stress test exercise and perform the necessary calculations. See section 54A of the Pensions Act.

Superannuation scheme

A term often used in the public service to describe an occupational pension scheme available to civil and public servants.

Supervisory review process

The Pensions Authority must review the strategies, processes and reporting procedures established by the trustees of a pension scheme to comply with certain requirements of the Pensions Act, including the governance requirements and investment rules. The Authority decides on the scope and frequency of the supervisory review and must take into account the size, nature, scale and complexity of the activities of each pension scheme. A supervisory review by the Authority includes:

(a) an assessment of the qualitative requirements relating to the system of governance,

(b) an assessment of the risks that the pension scheme faces, and

(c) an assessment of the ability of the pension scheme to assess and manage those risks.

See section 26J of the Pensions Act.


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

System of governance

Trustees of pension schemes must have an effective system of governance to manage the activities of the pension scheme. The system of governance encompasses general governance requirements as well as rules around trustee board composition, the key function requirements (risk management and internal audit), the remuneration policy and written policies for risk management, internal audit and outsourced activities.

The system of governance should include:

(a) an adequate and transparent organisational structure with a clear allocation and segregation of responsibilities which:

(i) sets out the functions and activities required to manage the pension scheme, and

(ii) states each person responsible for carrying out each function and activity,

(b) an effective system ensuring the transmission of information, and

(c) consideration of environmental, social and governance factors in investment decisions.