Glossary

Pensions

Group Personal Pension (GPP):

A collection of individual personal pension plans set up by an employer for employees. These types of pensions attract tax relief and generally an employer contribution.

Stakeholder Pension:

A low-charge pension intended to encourage more people to save for their retirement, particularly low earners. It is generally paid into by the individual, the employer may (or may not) also contribute too.

Final Salary Scheme:

This scheme pays a fraction of your salary for each year that you work at the company (eg.1/60 or 1/80). This takes the form of a fixed amount of income that you receive at retirement.

Money Purchase Scheme:

The benefits for a member of this scheme are dependant on the amount and timing of contributions paid by, and in respect of, the individual.

Contracted in Money Purchase (CIMP) scheme:

Decided upon by the employee. Involves the individual to be contracted into the State 2nd Pension.

Contracted out Money Purchase (COMP) scheme:

Operated by the employer. Involves the individual to be contracted out of the State 2nd Pension.

Self Invested Personal Pension (SIPP):

A form of personal pension allowing the individual to make their own investment decisions from a wider range of options than a standard contract.

Small Self Administered Scheme (SSAS) and Executive Pension Plan (EPP):

These are examples of contracted in money purchase schemes for a small number of employees. They offer greater flexibility and control of the scheme assets than a standard scheme and they are generally used to meet specialist requirements of company executives.

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Insurance and Benefits

Keyman Insurance:

Protects businesses from loss of income in the event that a key member of staff or director is incapacitated or dies.

Group Private Medical Insurance (PMI):

Enables an individual to receive necessary treatment at their convenience and potentially aid a speedy return to work. PMI can cover the cost of surgery, treatment and accommodation during ill health along with outpatients’ treatment including such things as day surgery, Physiotherapy and Osteopathy. The insurers within this market provide varying levels of cover to suit different requirements.

Group Death in Service/Life Assurance:

Pays a multiple of the employee's salary to a nominated beneficiary as a tax free lump sum in the event of the employee's death.

Spouse's/dependent's pension:

In the event of an eligible employee’s death, spouses/dependents (who are covered by the scheme rules) will be eligible for a pension until their death. The amount of the pension can be expressed in a number of ways, including a percentage of the employee's salary, fraction of the employee’s prospective pension and a multiple of salary. In the case of the latter, the multiple will be used to by an annuity to provide a pension.

Group Critical Illness Cover (CIC):

Enables employers to protect their staff should they develop a critical illness. When an employee is diagnosed with a specified critical illness or permanent total disability, typically a multiple of salary is paid as a lump sum by the insurer to help to ease any associated financial implications.

Group Income Protection (GIP):

Provides employees with a regular monthly income should they become ill or injured resulting in an inability to work. Many insurers offer professional support to claimants in rehabilitating them back to work.

Flexible Benefits:

Employees are given a benefit allowance in order to choose the benefits they receive, such as subsidised transport, childcare vouchers or a mobile phone package along with the general benefits like PMI or GIP.

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Corporate Services

Personal one to one meetings:

Individual meetings provide an ideal platform for employees to discuss retirement options with an Independent Financial Adviser. They create an opportunity to have any questions answered or make informed personal choices around pension contributions, fund choice and nominating a beneficiary.

Group Presentations:

During a Group Presentation, the benefits of planning for retirement are outlined which improves understanding of how much to invest and which funds to select. They also present an ideal opportunity to dispel the myths surrounding pensions and have questions answered.

Fund switches:

As the value of your funds increases and decrease, it may be necessary to switch funds, taking into account your attitude to risk. These include a number of funds that make up any Lifestyle Investment Programmes.

Market Review:

A market review of insurance rates is a sensible idea to ensure the employer is getting the most competitive rates and terms and conditions from the market. This involves the intermediary approaching the market that insures a particular benefit with information on the existing policy and requests insurers to quote.

Scheme Renewal:

Some types of insurance like Group Income Protection have a unit rate that the annual premium is based on and these are usually guaranteed for two years. After a policy year has passed the insurer will want to complete a renewal of the scheme. This includes the employer providing the insurer with up to date membership data and the production of accounts detailing any premiums or reimbursements due, plus the estimated premium due for the forthcoming year. The insurer will also inform the insured of any medical underwriting requirements at this time.

Claims:

For certain benefits including Group Income Protection and Group Life Assurance, claims are made through the intermediary. The intermediary should ensure that all parties are up to date with the progress of any claim and that the process goes as smoothly as possible for the insured and the insurer.

Medical Underwriting:

The process used by insurers to assess the medical wellbeing of members who exceed the free cover limit and late joiners to a scheme. Typically this process may include the following: completion of a health declaration, General Practitioner's Reports, an Independent Medical, Electro Cardiograph, Blood tests and/or HIV Saliva test.

Free Cover Level (FCL):

An insurer will guarantee to cover members of a scheme up to a certain salary or benefit level. Members whose salaries exceed the Free Cover Limit will need to go through the medical underwriting process.

Corporate Investments:

Many companies often keep a lot of capital held within bank accounts. More adventurous investments such as property, bonds and shares can be an alternative, some of which have attractive tax breaks.

Business Protection:

Protects your organisation from adverse financial effects resulting from the death or critical illness of a key person, partner or shareholder. Losing these key people could damage turnover or profit. Typically a life or critical illness policy is set up on key individuals to protect the company.

Partnership/Director Share Purchase:

Protection for families and co-owners in the event of a partners/directors death, are of great importance. Each party agrees the value beforehand of his/her share, and a combination of term assurance policies are set up to ensure that in the event of their death, the surviving owners have a sum in place to buy out the family of the deceased.

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Employee Services

Personal Pension:

A tax efficient way of saving for your retirement. Monthly or lump sum contributions can be paid into a fund, and at a selected retirement date, a regular income and lump sum is provided. The amount of money contributed can vary depending on the personal circumstances of the individual.

Pension Consolidation:

People often have a number of deferred pensions either from a previous employer or personal arrangement. Consolidating them could mean that you have a simpler, easier to manage arrangement.

Buying your own Home or Investment Property:

When buying a property, a mortgage is often used in order to fund the purchase. The market is reviewed in order to gain competitive rates, terms and conditions. This can be a lengthy and confusing process which we at Estate Capital aim to simplify.

For those with an existing mortgage, we can review the market to ensure you have the most competitive arrangement, and could potentially help you pay off your mortgage earlier than previously expected.

Mortgage Protection:

Once you have decided on a property and taken on a mortgage, it is equally important to protect your investment. Various insurances exist to either repay the mortgages in full or pay the monthly interest, in the event of sickness, death or unemployment.

Private Medical Insurance:

Enables an individual to receive necessary treatment at their convenience and potentially aid a speedy return to work. Private Medical Insurance can cover the cost of surgery, treatment and accommodation during ill health along with outpatients’ treatment including such things as day surgery, Physiotherapy and Osteopathy. The insurers within this market provide varying levels of cover to suit different requirements.

Life Assurance:

Pays a lump sum in the event of your death. Many types of assurances exist designed to either repay a mortgage or protect your dependents.

Income Protection:

Provides you with up to 75% of your income until you retire or return to work should you become ill or injured resulting in an inability to work. This benefit would maintain your financial commitments during absence from work.

Critical Illness Cover:

In the event of being diagnosed with a specified critical illness or total permanent disability, a lump sum would be payable by the insurer, which can ease some of the financial problems you are likely to experience with the potential loss of earnings, medical expenses or change of lifestyle.

Personal Investments:

Many individuals keep their money in bank accounts. Alternative investments with attractive tax treatment exist such as ISA's, bonds and shares.

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