Glossary of Terms & Definitions
Act – the National Pension Scheme (Occupational Pensions) Act 1998.
Actuary – a professional responsible for performing, inter alia, valuations of a pension plan’s assets and liabilities and calculating the costs of pension benefits. Furthermore, for the purposes of the Act, they must be a person who has qualified as an actuary and is a current member in good standing of the Institute of Actuaries in England, the Faculty of Actuaries in Scotland, the Societies of Actuaries in the United States of America, the Canadian institute of Actuaries or some other professional association recognized by the Commission.
Additional Voluntary Contributions – contributions to a pension plan by a plan member beyond any required amount of contributions.
Administrator – a person or persons that administers a pension plan.
Annuity – a financial product usually issued by an insurance company that provides periodic payments for the lifetime of a former plan member (annuitant) or a designated beneficiary after the death of the annuitant.
Beneficiary – a person or persons who has been formally designated in writing by a plan member to receive any benefits from the plan payable upon the death of the member.
Defined Benefit Plan – a pension plan providing a pre-determined benefit according to various factors such as a member’s level of final earnings and length of employment.
Defined Contribution Plan – a pension plan whose final benefit is determined according to the total value of accumulated contributions made to the plan by a member and/or on behalf of a member by an employer.
Early Retirement – for purposes of the Act, a member or former member of a pension plan who has retired within ten years of attaining the normal retirement date.
Employee – a Bermudian or the husband or wife of a Bermudian who is employed in Bermuda by an employer.
Employer – a person in Bermuda who employs employees and includes a self-employed person.
Financial Institution Pension Plan – a pension plan established by a financial institution (a licensed bank, registered insurer, local trust company holding an unlimited trust licence, or any other approved company) and approved by the Commission to offer a defined contribution pension plan for individuals, whether employees or self-employed.
Former Member – a person who has terminated employment or membership in a pension plan and is entitled to a deferred pension or a payment from a pension fund.
Local Retirement Product – a retirement plan provided by a financial institution in Bermuda or some other body or person in Bermuda recognized by the Commission, which provides retirement benefits and which is approved by the Commission.
Locking-in – when pension contributions or benefits cannot be refunded or forfeited.
Member – a person who is a member of a pension plan.
Multi-Employer Pension Plan – a pension plan established and maintained for employees of two or more employers who contribute or on whose behalf contributions are made to a pension fund in accordance with an agreement between the employers, but does not include a pension plan where such employers are affiliated of a financial institution pension plan.
Normal Retirement Age – the normal retirement date under a pension plan in which a member or former member is entitled to receive their benefits. For purposes of the Act, the normal retirement date shall not be later than one year after a member of a pension plan has attained the age of sixty-five years.
Overseas Retirement Product – a retirement plan provided by body or person outside Bermuda which provides retirement benefits and which is recognized by the Commission.
Pensionable Earnings – in the case of an employee, any of the following payments expressed in monetary terms and paid (directly or indirectly) to the employee by the employer: in the case of an employee, any wages, salary or leave pay, any fee or commission, any bonus, including payments from a profit sharing scheme, up to a maximum of $200,000 per year.
Pension Fund – the fund that holds contributions, accumulates investment income or earnings from which pension benefits are paid to members or former members or their beneficiaries.
Pension Plan – an occupational pension retirement scheme organized and administered to provide pensions for employees or a financial institution pension plan.
Portability – options available for transferring a member’s or former member’s benefit on termination of employment or retirement.
Self-Employed Person – a person over school leaving age, whose earnings (otherwise than in the capacity of an employee) derive from their production (in all or part) of goods or services in Bermuda, or his trade in goods or services in or from Bermuda.
Vesting – when a member becomes entitled to receive the value of the pension contributions made or plan benefits.
Winding Up (or Wind-Up) – the termination of a pension plan and the subsequent distribution of assets of the pension fund.