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Jargon buster

The place to check what terms mean

When people talk about pensions, they can often use a lot of technical terms and industry acronyms. We aim to always talk in plain English, but have included some common pension terms below with a handy explanation. 

If you ever spot a term you don’t know and can’t find in our jargon buster – drop us a line. We’ll be sure to add it in.


A regular income provided by a policy that is bought from an insurance company. Essentially another name for the pension we pay when you retire.


A bulk annuity policy bought by trustees from an insurance company that is an asset of the scheme and helps manage their ongoing liabilities. The trustees and scheme remain in place and the administration stays the responsibilities of the trustees.


Annuity policies bought in bulk by trustees from an insurance company, typically covering all the pension scheme’s liabilities. Members of the scheme become PIC policyholders and the scheme typically winds up . We also take on responsibility for ongoing administration alongside payment of policyholders' pensions.

Defined Benefit (DB) Scheme

A type of pension offered by employers where the yearly amount you receive in retirement is known and is based on your length of service with the company and your salary when you worked there. Often called a Final Salary pension.

Defined Contribution (DC) Scheme

A type of pension where the benefits (amount you will receive in retirement) is not known, but the amount you save each month (the contribution) is.


ESG stands for Environmental, Social, and Governance. They are non-financial ways to assess the risk of an investment and its wider impact. It’s also an area we are required to report on. 


The Financial Conduct Authority regulates the financial services industry in the UK. It looks after consumers, protects financial markets and supports healthy competition.  

Professional Trustees

Professionals in the pension industry who act as trustees of a pension scheme (or funds) for a fee. They are typically not connected with the company or pension scheme.


The cost of paying all future pension payments promised to pension scheme members. 


Living long is the literal translation, but it’s usually referring to living longer than average. PIC actively reinsures longevity risk (the risk to pension schemes of people living longer than anticipated) so we can fulfil our purpose.

Market volatility

The amount of movement in financial markets – big increases or decreases happen where there is high volatility. Small movements happen where there is less volatility. Market volatility can cause problems for pension schemes where big losses change the value of their assets so they no longer match their liabilities. This can affect their ability to transact a buy-in or buyout policy with us.

Net Zero

A target of completely negating the amount of greenhouse gases produced by human activity, to be achieved by reducing emissions and implementing methods of absorbing carbon dioxide from the atmosphere.

These targets are defined in three ways by the United Nations:

  • Scope 1: direct emissions from resources we own and control, like heating the office, cooling the office or vehicles we might own
  • Scope 2: indirect emissions owned by us, this is our consumption of purchased electricity, heating and cooling
  • Scope 3: indirect emissions not owned by us. For firms like ours, the bulk of these emissions lie within our investment portfolio


An individual that owns an insurance policy and is now the customer of an insurance company. Our policyholders all had pension benefits in a defined benefit pension scheme and the trustees of the pension scheme bought an insurance policy (also known as an annuity policy) from us.

Each policyholder receives a policy document that says what benefits will be paid to them and when.


The PRA (The Prudential Regulation Authority) is a part of the Bank of England responsible for the oversight of prudential risks within Banks and Insurance Companies (amongst other companies), and is the prudential regulator of PIC. They manage the safety and soundness of the UK financial systems through policy and regulation setting, authorising new entrants and conducting forward looking exercises to understand risk. Some financial services firms are subject to dual regulation (like PIC) – this means we are prudentially managed by the PRA, and conduct managed by the FCA.


The company that is responsible for supporting the pension scheme prior to a buyout.

Transition process

Where we move the responsibility for making pension payments from the trustee administrator to PIC. The process usually takes between six and 18 months (working closely with the scheme trustees) because we check every detail to make sure the right pension is paid to the right person at the right time. 


A trustee is a person or company, acting separately from the employer, who holds assets in the trust for the beneficiaries of the pension scheme. Trustees are responsible for ensuring that the pension scheme is run properly and that members' benefits are secure.

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