1 940g

To help you understand this site, here are some technical terms explained.

 
  • General terms

    The default option
    This is the option you would be invested in if you have not made an investment choice in the Plan

    The Chair’s statement
    This document sets out the checks and governance in place to help run the Plan effectively and help members save for retirement

    The Trustees
    These are the people responsible for running the Plan under Trust in the interests of the members

  • Investment terms

    Bonds
    Loans issued by organisations or governments for different lengths of time (that is, the investor loans the organisation or government money for a period of time)

    Company (or corporate) bonds
    Bonds issued by private and public companies.

    Emerging markets
    Investments in geographical areas which are still considered to be developing economically, including Eastern Europe, Latin America, Africa and parts of Asia

    Pre-retirement
    A fund that invests in a range of investments whose performance is expected to match changes in annuity rates (that is, the rate of converting retirement savings into pension)

    Shariah law
    Investments that abide by the principles of Islamic Shariah Law which prohibit the payment of interest or fees for loans of money.

    Shares / Global shares
    A share in the ownership of a company. Global shares are shares that are traded on stock markets, in a range of currencies, around the world.

    Diversified growth
    A wide range of investments usually including shares, bonds, cash, commodities, property and other investments, generally investing in different geographical regions and business sectors.

    Money markets
    Sterling investments including short-term bank deposits, UK government bonds, and promissory notes such as Treasury bills .


  • Different ways of investing: active vs index tracker funds

     

    Active
    The investment manager uses his/her expertise to decide which investments to buy, sell or hold onto. The aim is to beat the return of a particular index. Because of this, funds that are actively managed generally have higher charges than other types of investment management.

    Index tracker/passive
    The investment manager chooses a market index and invests in broadly the same investments as that index (for example, the Financial Times Stock Exchange (FTSE) All-Share Index which is made up of all the shares quoted on the UK Stock Exchange). Returns follow (or track) the returns for that index.

    Pooled investment funds 
    This type of funds are a way of putting sums of money from many people into a large fund spread across many investments and managed by professionals. Investing this way can be easier and less risky than buying shares in individual companies direct. Pension funds use both their own ‘pooled’ funds and ones set up by investment management companies which you could also invest in as an individual.