Active Investment Style

An investment approach where the fund manager holds a bias in their fund to the investments they think will perform the best. The aim is to out perform an index, market average or benchmark.

Annual Allowance

This is the maximum amount you may contribute to registered pension schemes in any tax year. The Annual Allowance for 2017/2018 is £40,000, however this will be reduced by £1 for every £2 of income between £150,000 and £210,000. The minimum allowance for those earning £210,000 or more will be £10,000.

Annual Management Charge ("AMC")

This annual charge is deducted directly from the fund to cover through unit price adjustment all of the costs of the Master Trust.


An annuity is an insurance contract that insures against you living too long. In return for a lump sum (the money you have saved in your pension pot), an Annuity Provider (typically this will be an Insurance Company) will give you an income for the rest of your life.

People who have serious health problems should be offered a higher rate than someone who’s likely to live for many years. The insurer is essentially taking a bet that it won’t end up paying out more than the total pot.

Auto Enrolled Eligible Job Holder

This is a worker who is:

Automatic Enrolment

Automatic enrolment is a Government initiative to help more people save for later life through a pension scheme at work. It makes it compulsory for employers to automatically enrol their eligible workers into a pension scheme.

Automatic Enrolment Date

Your Auto Enrolment date is the later of

  • when you have been informed of the Auto Enrolment
  • your employer’s Staging Date
  • the date you were employed 

Automatic Enrolment Opt Out Period

This period lasts for one month following your Automatic Enrolment Date.


These are also known as fixed interest investments. They are loans issued by the government (also called gilts), local authorities, financial institutions and companies (also known as corporate bonds). In return for an investment, they will pay interest for a given period and return the money at the end of the agreed period of the loan. The price of the loan will vary during its lifetime so there is some element of risk, although not as high as for shares (equities).

Cash-based Investments

Cash is generally considered the least volatile of all the main investment types. This means its price does not tend to move much either up or down on a daily basis. The downside is that cash tends to have far less potential to grow than other investments and it can actually fall in value in real terms because of inflation. This is why it is most suited to investors as a shorter-term investment. Cash generally includes money, typically held in bank deposits, and other types of money market investments, which pay the investor regular interest.

Comms Date

This is the date on which your Employer writes to inform you about your enrolment.

Compulsory Purchase Annuity

The technical name for an annuity purchased using the proceeds of your pension pot. It used to be compulsory to purchase an annuity but this compulsion was removed in April 2006.

Default Fund

A default fund is the fund that an Employer or Scheme Trustee has chosen for scheme members who don't make an active fund choice. Any members who do not choose a Fund will automatically be put into theis Fund.

Defined Benefit Scheme ("DB")

Also known as Final Salary schemes. The benefits you receive at retirement are based on your earnings and your length of membership in the scheme. For each year and month of membership you will receive a percentage of of your earnings. E.g. If you salary is £40,000, your length of membership is 32 years and 6 months and the scheme's accrual rate (percentage) is 1/60, your pension will be £40,000 x 32.5 x 1/60 = £21,666.67.

Defined Contribution Scheme ("DC")

Defined contribution (DC) schemes are occupational pension schemes where your own contributions and your employer's contributions are both invested and the proceeds used to buy a pension and/or other benefits at retirement. A DC scheme has a set contribution for the employee and a set contribution for the employer.

Eligible Jobholder

This is a worker who is between age 22 and State Pension Age and who earns more than the current qualifying threshold.

Enhanced Protection

Protection from a potential lifetime allowance charge is available for individuals with pension rights at 5 April 2006 whether they are valued at more than £1.5 million or not. It is a means to protect pension rights built up before 6 April 2006 from the lifetime allowance charge when those rights crystallise after that date. Enhanced Protection would be lost if any benefits are accrued in a pension arrangement after 5 April 2006.

Entitled Worker

This is a worker who is not Auto Enrolled as he / she earns less that the Lower Contribution Threshold


Equities, or shares, offer part-ownership in a company, unlike bonds, which are loans. Equities are generally considered the most risky type of investment as their value tends to go up and down more than other investment types, in some cases quite dramatically. However, shares are widely considered to offer the greatest potential for returns. Due to the potential for significant gains or losses in value, shares are better suited to investors who are prepared to invest for the medium to long term.

Exchange-traded Funds ("ETF")

An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold.​

Fixed Protection

The Lifetime Allowance reduced from £1.8 million to £1.5 million on 6 April 2012 and reduced further to £1.25 million on 6 April 2014, and to £1.0 million on 6 April 2016. The LTA remains as £1.0 million from 6 Apri 2017. An individual can elect for fixed protection to retain the preceding Lifetime Allowance. It is not possible to accrue any additional benefits after the date of the lifetime allowance changes if fixed protection applies. 


Normally the investment choices are made for you automatically in the Default Fund. For investors who wish to make their own decisions, a Freestyle option is available which allows them to chose from a range of Funds.

Please see the Investment Choices Booklet.


Loan stocks with varying maturity dates issued by the UK government to fund the public sector cash requirement that pay a fixed rate of interest until their repayment date. Gilts are traded in the bond market and their value will be influenced by a number of underlying economic factors such as interest rates and inflation.

Investment Manager

The person / company who manages a fund. They make investment decisions on behalf of the investors in a fund by conducting interviews, research, and statistical analyses of companies, markets, and trends to determine what investments to make or avoid.


Lifestyling is an investment option that is designed to lock in investment growth as you near your retirement age. Lifestyling involves investing in riskier assets when you have a long period before drawing your retirement benefits and at a set point before your Targeted Retirement Age start to consolidate the gains by moving the assets into less riskier investments.

Lower Contribution Threshold

This is currently £5,876 for the 2017/2018 tax year.

If you want to know more, please visit the Pensions Regulators website.

Managed Fund Type

Managed funds usually invest across the main types of investment types. Some may include other investment types like property. Managed funds generally give access to bond and stock markets worldwide.

Net Pay Arrangement

In a net pay arrangement, the employee contribution is calculated before tax is calculated in payroll and is actually deducted from gross pay. This means that the tax relief is given by lowering the amount of tax the employee pays. You must be a taxpayer to benefit from the tax relief top up with this method. High rate taxpayers immediately benefit from tax relief without the need for any additional tax reclaim. The disadvantage with this method is that if the member is a non-taxpayer they will not benefit from tax relief. 

Salvus Master Trust operates tax relief via the Net Pay Arrangement method.

All contributions collected by Salvus will be the full gross contribution as tax relief is immediately granted at the member’s highest ‘marginal’ tax rate via payroll with no additional tax reclaim required. Any member who is a non-taxpayer will not receive tax relief on their pension contribution. This will not affect the amount going in to the pension but will impact on take home pay.

Non-Eligible Jobholder

This is a worker who is not Auto Enrolled as he/she earns between the Lower Contribution Threshold and the Qualifying Threshold, or is under age 22, or over State Pension Age

Open Market Option ("OMO")

This option allows a person who is approaching retirement to have the opportunity to choose their annuity provider in order to achieve the best income available. 

Opt out of Automatic Enrolment

When an employee, who has been Auto Enrolled, chooses not to remain in their employer’s occupational pension scheme and informs their employer in writing within 1 month of receiving their auto enrolment information. 

Opt out of the Master Trust

When an employee chooses not to join or leaves an employer's occupational pension scheme.

Passive Investment Style

A style of management associated with mutual and exchange-traded funds (ETF) where a fund's portfolio mirrors a market index. 

Pension Commencement Lump Sum ("PCLS")

This is the cash sum you can take at retirement, which is currently tax free. 

Pension Input Period ("PIP")

The PIP is used to calculate the total amount of contributions received in a period to determine if the Annual Allowance has been breached. From 9 July 2015 all PIPs are changing. The PIP for the Master Trust has become the 6 April to the following 5 April. As members are unable to contribute more than the Annual Allowance in the Master Trust there will be no additional tax charge due. The administrator will review this on a yearly basis and contact members individually if they are approaching the Annual Allowance

Pension Scheme Tax Reference ("PSTR")

A Pension Scheme Tax Reference number is the unique reference allocated by HMRC when a pension scheme has been successfully registered for tax relief and exemptions. The Master Trust’s PSTR is 00776863RW

Pensionable Earnings

This is the amount on which your pension contributions are derived from. Pensionable Earnings is determined by your employer, however, it will be at least Qualifying Earnings

Pensions Regulator ("TPR")

The Pensions Regulator (TPR) is the UK regulator of work-based pensionschemes. It works with trustees, employers, pension specialists and business advisers, giving guidance on what is expected of them. TPR is an executive non-departmental public body, sponsored by the Department for Work and Pensions.

Qualifying Earnings

Qualifying earnings is the name given to a band of earnings you can use to calculate contributions for auto enrolment. For the 2017/18 tax year this is between £5,876 and £45,000 a year. The figures will be reviewed every year by the government.

Qualifying Threshold

The earnings trigger sets the point when someone becomes eligible to be automatically enrolled into a qualifying workplace pension. The qualifying earnings band sets out the portion of earnings on which the employee and their employer have to pay contributions into a workplace pension.

This is currently £10,000 for the 2017/2018 tax year.

Qualifying Workplace Pension

A workplace pension scheme must be a qualifying pension scheme to meet the requirements of automatic enrolment. It must also meet the minimum levels of contributions or allow benefits to build up at least at a minimum rate.

Qualifying schemes may be either defined benefit schemes or defined contribution schemes.

Employers have a number of different options available to them when selecting a suitable qualifying workplace pension scheme. They can:

  • use an existing workplace pension scheme, if it qualifies; existing members may notice no difference in the way that the scheme operates
  • amend an existing workplace pension scheme to meet the qualifying criteria; employers with existing pension schemes that do not meet the minimum qualifying criteria may decide to amend the scheme so that it qualifies
  • set up a new pension scheme which meets the qualifying criteria;
  • use NEST (the National Employment Savings Trust), a new scheme that is available to any employer to use for some or all of their staff
  • use a combination of these options for different areas of their workforce


Shares, or equities, offer part-ownership in a company. Shares are generally considered the most risky type of investment as their value tends to go up and down more than other investment types, in some cases quite dramatically. However, shares are widely considered to offer the greatest potential for returns. Due to the potential for significant gains or losses in value, shares are better suited to investors who are prepared to invest for the medium to long term. 

Staging Date

This is the date from when the Auto Enrolment duties come into force for your employer. 

State Pension Age ("SPA")

Your State Pension age depends on when you were born. The State Pension ages have been undergoing radical changes since April 2010. The changes will see the State pension age rise to 65 for women between 2010 and 2018, and then to 66, 67 and 68 for both men and women. 

Check your State Pension Age.

Statutory Money Purchase Illustration ("SMPI")

This is an illustration, provided annually, of your future pension that could be payable on retirement but in terms of today’s money. 

Stock Market

A stock market or stock exchange is a market for stocks and shares. Organisations can raise capital by selling securities through a stock exchange. 


Another word of Equities or Shares.


Moving money from one Fund to another.

Target Retirement Age ("TRA")

This is the age by which a member aims to retire. If an age is not chosen by a member of the Master Trust then it is assumed to be the default TRA specified in the Employer Fact Sheet. 

Tracker Fund type

A type of fund that aims to perform in line with a particular index by investing in the same shares and in the same proportions as those reflected in the index. 

Upper Contributions Threshold

This is currently £45,000 (tax year 6 April 2017 to 5 April 2018).