Glossary of terms in your SMPI

A guide to some of the key terms found in your annual statement

If you're not sure about some of the terms used in your annual statement, check our list below for a more details explanation. If you still have a question you'd like to ask us, you can contact our team here

Terms are listed in the order in which they appear on your statement. 


Membership status

Your status relates to whether or not we are receiving contributions to your pension savings fund on a regular basis:

 ‘Active’ - receiving contributions
‘Deferred’ - not receiving contributions.

If your status has changed, please advise us by email providing your name, national insurance number and the date you left the relevant employment. We will amend our records accordingly.


Target Retirement Date (TRD)

Your TRD is used to help calculate the estimated value of your pension savings when you come to retire. Your TRD is set to your state pension age, unless you let us know otherwise. You may change your target retirement date by completing and returning the Investment Options Form (Option 1).

Your state pension age is the earliest age you can start receiving your State Pension. Your State Pension age is worked out based on your gender and date of birth. You can find out more or check your state pension age on the Government’s website


Investment option

Members have a choice of four investment options: Cash Lifestyle, Annuity Lifestyle, Drawdown Lifestyle and Freestyle.  Your current choice is shown beside ‘Investment option’. 

All members of Welplan Pensions are initially enrolled into the default Cash Lifestyle, You can change your investment option at any time.

Read more about the four options in our Investment Options guide and use the Investment Options form to change your choice if you wish to.


Pensionable earnings

These are the earnings upon which your pension contributions are based. Your employer provides this figure and you should contact them for the definition of your pensionable earnings as this will vary from company to company.


Your contributions

Contributions are the payments that are received by the scheme, to be added to your pension pot.
As an active member of the scheme, each time you receive your wage or salary, a deduction is made that will go towards your pension pot.  This contribution is taken before tax is deducted, through a ‘net pay’ arrangement.


Your current contribution rate shows the percentage of your pensionable earnings that is deducted for your pension. Please note that If you pay Additional Voluntary Contributions, that percentage is not included in this figure. However, the diagram/s below will show the value of the AVCs that have been received.

Please note that your employer is not obliged to increase their contributions when you increase yours.


Your employer’s current contribution rate shows the percentage of your pensionable earnings that is currently being paid into your pension pot by your employer.  As Welplan Pensions is an Occupational Pension Scheme, we must receive an employer contribution for you to remain an active member of the scheme.


Transfer in

These are funds that you have transferred into your Welplan pension pot from other providers.  You can find out more about making transfers in by contacting Welplan direct.


Additional voluntary contributions

On top of your compulsory pension contributions, you may wish to make additional contributions to your pension pot. You can do that at any time and these are known as Additional Voluntary Contributions or AVCs, these deductions are also taken before tax is deducted.

AVCs do not have to be fixed; they can vary from time to time and you may make one-off payments as long as you are an active member of the scheme and the payment comes via your employer’s payroll. You can find more information in our Guide to AVCs.


Your contributions

This is the total of your contributions received and invested by Welplan up to the date of your statement.


Employer contributions

This is the total of your employer’s contributions received and invested by Welplan up to the date of your statement.

Annual Allowance (AA)

The annual allowance is a limit on the amount that can be contributed to your pension each year, while still receiving tax relief. It is currently capped at £40,000. The allowance includes both your own contribution and any other contribution paid on your behalf, such as an employer or a third party.

If you have taken some of your benefits, as an ‘Uncrystallised Funds Pension Lump Sum’ (UFPLS), you will have a reduced money purchase annual allowance (MPAA), from 6 April 2017, of £4,000 per year. 

PLEASE NOTE: This regulation did not come into force at 6th April 2017, due to the early General Election. However it may be the case that Government will introduce this in the current or parliament, and be retrospective to 6th April 2017. As soon as the position is clarified, we will update information accordingly.

If you exceed the annual allowance in a year, you will not receive tax relief on any contributions you pay that exceed the limit and you will be faced with an annual allowance charge. For more details, please visit The Pensions Advisory Service's website

If you are likely to exceed your annual allowance, you may be able to bring forward any unused annual allowances from the previous three tax years, to either reduce your annual allowance charge to a lower amount or reduce the annual allowance charge completely. 

Please contact Welplan if you would like us to provide your pension input amount for the year. If you think that you may be getting close to your annual allowance, or may have exceeded it, you may wish to consider taking advice from an independent financial adviser.


Your unit holdings

These are the units purchased per fund, prior to 5 April 2016 (blue area) and the number of units purchased per fund since 5 April 2016 (green area). Details of the various funds and their past performance can be found here.

When money is sent to Welplan pensions it is used to purchase units and the price of each unit determines the total value of your pension pot. The value of units vary on a day-to-day basis and the final value of your pot will depend upon the price of your units when we sell them.

The Trustees of Welplan Pensions regularly review the funds the scheme has on offer and have introduced an Ethical and a Faith (Amanah) Fund. An announcement will be made during April to let you know when you can use these fund. They are available as part of the Freestyle investment option.

The investment objective of the Legal and General Ethical Global Equity Index Fund is to track the performance of the FTSE 4Good Global Equity Index (less withholding tax if applicable) to within +/-0.5% p.a. for two years out of three. Investments are in the following sectors: Financials; Technology; Consumer Goods; Health Care; Consumer Services; Industrials; Telecommunications; Basic Materials; Oil & Gas and Utilities. The fund is a mutual fund which limits investments to companies that meet certain social standards.

HSBC Life Amanah Pension Fund is a pooled fund that offers investors the opportunity to grow their money in line with the performance of the 100 largest global companies engaged in Shariah compliant activities. Investments are in the following sectors: Technology; Health Care; Consumer Goods; Consumer Services; Oil and Gas; Industrials; Basic Materials; Financials; Telecommunications and Cash. The fund only invests in listed companies whose activities do not contravene the tenets of Islam and where any non-Shariah compliant revenue that might be earned is ‘purified’.


The Lifetime Allowance

The lifetime allowance is the maximum amount of tax relieved pension savings you can build up over your lifetime. It is set by government and reviewed regularly. For 2017/2018 the Lifetime Allowance (LTA) is £1 million. While most people are not affected by the lifetime allowance, if the value of your pension benefits is approaching, or above, the lifetime allowance, you should speak to an independent financial adviser as you may need to take action. From April 2018, the lifetime allowance will be indexed year on year in line with the Consumer Price Index.

The value of your pension pot

This is the total value of your pension fund, based on the contributions Welplan Pensions have received and invested at the date of your statement. It will not include any contributions we have received but have not yet been invested.


Estimated value of your fund at your Target Retirement Date

This figure shows the value of your pension pot at TRD, in today’s terms.


This fund might buy you an annual pension of….

This figure shows the amount of pension that might be payable when you reach your Target Retirement Date in today’s prices.

An annuity is a secure, regular income, which you purchase from an insurance company using your pension fund when you choose to retire.

Various assumptions are used to calculate this figure, these can be found here

If you are within 2 years or if you are beyond your target retirement date, you will not be given an Estimated value of your fund or annual pension at your target Retirement Date.


Retail Prices Index (RPI)

The Retails Price Index (RPI) was introduced in the U.K. in 1947, and tracks changes in the cost of a fixed basket of goods over time.  The RPI is used by the government as a base for various comparisons, such as the amounts payable on index-linked securities including index-linked gilts, and social housing rent increases.  


Annuity rates

An annuity is a secure, regular income, which you purchase from an insurance company using your pension fund when you choose to retire.


What can you do with your pension pot?

You are not able take benefits, with the exception of serious ill health, until you reach at least age 55.
This age is set by government. It may not be in your interests to take benefits so early, and consideration should be given to how long you expect to retire, and how much income you might need.  

You can transfer your funds to another pension scheme at any time. We recommend you read the Pensions Advisory Service website.


If you would like information on accessing or transferring your savings please email us

Please provide your name, address and National Insurance number along with your request.

We aim to issue the relevant information in 10-12 working days. Please be aware that volumes of work in April/May, can be higher than other times due to the provision of annual statement to our members, so your request may take a little longer to process.


The information contained in your statement is not financial advice and must not be used as the only basis on which you make a decision regarding your pension arrangements or any other financial commitment. Before you make any decisions, we strongly recommended that you seek independent financial advice. You can find an independent financial advisor (IFA) in your local area by visiting