OSPS Special Terms

In order to describe your pension benefits accurately, we need to use some special terms.

Active member

This is an employee who is making contributions to OSPS, either directly or through Salary Exchange.

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Annual allowance

This is the total value that can be added to your benefits in a tax year before you have to pay tax on it. It has been set at a high level, which is unlikely to affect most OSPS members.

It can include all the following:

  • the increase in value of your OSPS pension over the year;
  • any additional voluntary contributions (AVCs) you pay;
  • any contributions you pay to other pension arrangements, such as a personal or stakeholder pension.

These amounts are measured over the ‘pension input period’ for each pension arrangement you are a member of. Pension schemes may have different pension input periods and they are not necessarily the same as the tax year. The pension input period for OSPS is April to March each year.

The amount of the annual allowance is currently fixed at £50,000.

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Dependant

This is your husband, wife or civil partner at the date of your death. At the discretion of the Trustees, it may include someone (irrespective of gender) who:

  • you were living with when you died in a relationship closely resembling marriage; and
  • was financially dependent or inter-dependent with you.

It can also mean anyone (but not a child) who, in the opinion of the Trustees, was wholly or partly financially dependent on you, or to whose maintenance or education you were contributing, when you died.

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Final pensionable salary

This is the greater of:

  • the pensionable salary you receive in the twelve months immediately before you retire, die, or leave OSPS; or
  • your pensionable salary for any twelve consecutive months during the five years immediately before you retire, die or leave OSPS.
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Five-year guarantee

This is a cash sum which is payable if you die within five years of retiring. It is the balance of five years’ pension payments.

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Irregular Employee

This is an employee who works irregular hours that vary from time to time depending upon the needs of their employer. Irregular employees are not admitted automatically to the scheme and can only join at the invitation of their employer. The Pensions Office will not confirm membership until the employer certifies that the individual is an employee and has been invited to join the scheme.
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Lifetime allowance

This is the value of the total benefits you can build up under tax-privileged arrangements during your working life. It covers benefits from all the pension arrangements, personal and occupational, of which you are a member. It does not include any state scheme benefits. If the value of your total benefits is over the lifetime allowance when your retire, you will have to pay extra tax on the excess.

The amount of the lifetime allowance will vary each year. If you wish to find out what the lifetime allowance is in any given tax year, please contact the Pensions Office who will be able to tell you.

It is unlikely that any OSPS member will exceed the lifetime allowance unless they have significant benefits elsewhere.

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Normal Retirement Date

This is 31 July immediately before your 66th birthday.

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Pensionable salary

This is your basic salary or wages from your employer. If you take part in Salary Exchange, it is your salary before any reductions for Salary Exchange. It includes:

  • any regular overtime required under your contract of employment and treated by your employer as part of normal remuneration; and
  • any regular payments which are pensionable.
  • It does not include other overtime, or any fluctuating payments.

If you work part-time, your pensionable salary is based on your actual part-time salary for working out contributions and lump sums due if you die. For working out other benefits, your pensionable salary is based on the full-time equivalent of your salary.

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Pensionable service

This is:

  • your period of service in years and days as an active member of OSPS; and
  • any further period credited to you by the Trustees, such as service credited by transfers in from other schemes or from AVCs .

If you work part-time, your pensionable service is in proportion to the hours you work.

If you have received a refund of contributions for any part of your service, this will not count towards your pensionable service.

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Pensioner Member

This is a member or dependant who is receiving an OSPS pension.

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Qualifying Service

This is used for working out the preserved benefits you are entitled to if you leave service before you retire, but leave your benefits in OSPS rather than transferring them to another pension arrangement. It is broadly the same as pensionable service.

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Salary Exchange

In the Salary Exchange arrangement instead of you paying contributions to the pension scheme, your employer pays the equivalent of your contributions into the pension scheme. Your employer then reduces your salary by the amount of your contributions, enabling you to make savings on your National Insurance (NI) contributions.

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