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Consumer > How a pension works > D to G
D to G
| Term | Description |
|---|---|
| Defined Benefit Pension | Type of pension where income in retirement is directly related to earnings and years of service with an employer. Also known as final salary pension. |
| Defined Contribution Pension | Type of pension where payments are known in advance but the income provided in retirement is unknown. Also known as money purchase pension. |
| Dependant | A person that is financially dependent on someone else. |
| Earnings Cap | The limit on earnings that can be used when calculating the maximum payments and benefits allowed for a number of different types of pension. Replaced by the annual allowance and lifetime allowance from 6 April 2006. |
| Enhanced Protection | A method of protecting the value of pension benefits built up by 5 April 2006 from the lifetime allowance charge when benefits are taken. |
| Executive Pension Plan | An occupational (company) pension plan that an employer sets up for employees, usually senior executives and other key personnel. |
| Financial Services Authority (FSA) | The body set up by the Government to regulate financial services in the UK. |
| Final Salary Pension | Type of pension where income in retirement is directly related to a person's final salary and the number of years service with an employer. Also known as defined benefit pension. |
| Free Standing AVC Plan | An individual pension plan designed to top up an occupational pension but which is separate from the main scheme. |
| Fund | See investment fund and pension fund. |
| Group Personal Pension / Group Stakeholder Pension | A collection of individual plans that benefit from the same charges and a central collection point for payments. Often provided by employers for employees instead of an occupational pension. |
| Guaranteed Annuity Rate | The right to use the proceeds of a pension plan to buy an annuity at rates determined when the plan was taken out. Only available on some older pensions. |
| Guaranteed Minimum Pension (GMP) | The minimum pension that occupational pension schemes must provide for pre 6 April 1997 service (unless the scheme was contracted-out through the provision of protected rights). |
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