Pension terms

Pensions can sometimes be confusing if you don’t know the terms, so we’ve listed a few common terms to help you.


The day-to-day running of the Scheme, which includes collecting contributions, paying benefits and keep accurate member records.

Annual allowance

The limit on what you can save in pension schemes every tax year, including employer contributions and AVCs. Any savings over the annual allowance is subject to charges from HM Revenue & Customs.

The limit in 2018/19 is £40,000 per year.

Automatic enrolment

The process of enrolling employees into a pension scheme, if they meet government-set criteria. Automatic enrolment has been in place since 2012, and is to help more people save for their retirement so they don’t have to rely on just their State Pension.

Additional Voluntary Contributions or AVCs

Contributions that you can make to the Scheme over and above your regular contributions. You can use the AVCs to buy extra pension benefits when you retire.


Someone who may be eligible to receive pension benefits from the Scheme in the event of your death, such as a spouse, partner or young children.


What you (or your beneficiaries) are entitled to receive from the Scheme, in the form of regular monthly payments and/or lump sums.

Benefit statement

An annual statement showing the estimated value of your benefits that have built up so far, and what you might get when you retire. Usually you will get one benefit statement per year, and only while you’re an active member.

Commutation factors

Used to calculate any lump sums due when you retire.

Consumer Prices Index or CPI

An index of UK price inflation. Some elements of your pension benefits will increase in line with CPI when it is in payment.

Defined benefit or DB pension scheme

A type of pension scheme that calculates the benefits due based on your length of service and your earnings.

The MRC Pension Scheme is a DB scheme.

Sometimes referred to as final salary or salary related schemes.

Deferred member

Someone who has left the Scheme but hasn’t taken their benefits yet.

Deferred pension

The benefits built up to a deferred member’s date of leaving the Scheme. They will remain with the Scheme until the member retires or transfers the pension elsewhere.


A person, such as a spouse or child, who was financially dependent on a member when they died. Rules differ from scheme to scheme, but they usually have a specific definition for a dependant. For example, a child will be classed as a dependant until they reach a specific age.

Expression of wish

How you tell the Trustee of the Scheme who you want to receive any benefits that may be due if you die.

Guaranteed Minimum Pension or GMP

The GMP is effectively a proportion of the State Pension that the Scheme has to pay a member if they were contracted out of the State Earnings Related Pension Scheme (SERPS). While someone was contracted out of SERPS, they weren’t building up State Pension, so it is paid by the Scheme instead.

This only applies to service before 6 April 1997.

HM Revenue & Customs or HMRC

HM Revenue & Customs determines the tax rules that apply to pension schemes.

Internal Disputes Resolution Procedure or IDRP

A formal procedure that all pension schemes have to have in place and designed to resolve disputes between members and the Trustee. An IDRP is usually used if there is a complaint that can’t be resolved by the administration team.

Independent trustee

An individual or company who performs the duties of the trustee but has no other direct or indirect involvement with the Scheme or its advisers, the sponsoring employer or the members.

Lifetime allowance

The limit on the overall value of your pension savings in all schemes (except your State Pension) before being subject to tax charges from HM Revenue & Customs.

In 2018/19, the lifetime allowance is £1.03 million and will increase each year in line with inflation.

Lump sum

Also known as a Pension Commencement Lump Sum or tax-free cash, this is an amount you may be able to take at the time you retire. Most people will have the option of taking a maximum PCLS and taking a reduced pension.

Member-nominated Trustee Director or MND

A Trustee of the Scheme who has been chosen by other members to help make sure the Scheme is run correctly. An MND must be a member of the Scheme.


National Insurance contributions.

Normal pension age or NPA

The age at which you can retire from the Scheme without your benefits being reduced for early payment. For some people, this is the same as your State Pension Age.

Participating employer

An employer who contributes or has contributed to a multi-employer or industry-wide occupational pension scheme and has been admitted to participate in the scheme under the scheme rules.

Pensionable service

This is the amount of time you have been a member of a pension scheme. This is measured in months and complete days of continuous scheme membership.


A person who is currently receiving a pension from a pension scheme.

Pensions in payment

Pensions that are currently being paid.

Preserved benefits

Benefits that are held by the scheme for an individual ceasing to be an active member of an occupational pension scheme, payable at a later date (e.g. a member who leaves that employment before retirement date).

Principal Employer

The Principal Employer of the Scheme is UK Research and Innovation; MRC is part of UKRI.

Reckonable Service

This is the same Pensionable service


State Second Pension.


State Second Pension.

The earnings related element of the state pension scheme which has replaced the State Earnings Related Pension Scheme (SERPS) to enhance the basic state pension.


State Earnings Related Pension Scheme (replaced by S2P, the State Second Pension).

Spouse & Same Sex Marriage

The person to whom you are legally married at the time of death.

Transfer value

Sometimes referred to as a Cash Equivalent Transfer Value or CETV, this is the cash value of your pension benefits if you wanted to transfer it to another pension provider.

Trivial commutation

If the value of your pension benefits is below a certain level when you retire, you might be able to take the entire value as a one-off lump sum.


A legal entity governed by specific terms and conditions for the benefit of members of the MRC Scheme. Money placed in the trust is held separately to the assets and liabilities of MRC and UKRI.


The trustees are the directors of MRC Pension Trust Ltd, which is a corporate trustee. The directors are nominated to their posts by MRC and UKRI and by members of the Scheme.