Glossary
Plain-language definitions of 23 terms you will see on payslips, benefit statements and fund documents. Fund rules and the law always take precedence over these general explanations.
A
- Actuary
- A specialist who assesses a fund's financial health, including whether it can meet the benefits it has promised.
- Annuity
- A regular income, usually paid monthly for life, bought with retirement savings.
B
- Beneficiary nomination
- A form telling your fund who you would like to receive benefits if you die. The trustees consider it when deciding how to pay death benefits.
- Benefit statement
- A regular statement from your fund showing contributions received, investment growth and the current value of your benefit. Check it every year.
C
- Commutation
- Taking part of your retirement benefit as a lump sum instead of as pension income, within the limits set by the fund rules and the law.
- Compound growth
- Growth on top of growth: investment returns are reinvested and earn returns themselves, which is why saving early has such a large effect.
- Contribution
- The money paid into a pension fund each month. Your contribution is usually deducted from your salary; your employer normally pays a contribution as well.
D
- Defined benefit
- A type of fund that promises a pension based on a formula, usually your salary and years of service. The employer carries the risk of making sure there is enough money.
- Defined contribution
- A type of fund where your benefit depends on how much was contributed and how well the investments performed. The risk of poor returns sits with the member.
F
- Fund administrator
- The organisation that keeps member records, collects contributions and processes benefit payments on behalf of a fund.
- Fund credit
- The value of your share of a defined contribution fund at a particular date: your contributions and your employer's, plus investment growth, less costs.
- Fund rules
- The registered document that sets out how a fund works: who can join, how contributions are calculated and when and how benefits are paid.
I
- IPEC
- The Insurance and Pensions Commission, Zimbabwe's statutory regulator for insurance and pensions. It registers and supervises funds and protects members' interests.
N
- Normal retirement age
- The age, set in the fund rules, at which members are normally expected to retire and start receiving their benefits.
P
- Pension and Provident Funds Act
- The main law governing pension and provident funds in Zimbabwe, supported by regulations issued under it.
- Pension fund
- A fund set up to provide an income when members retire. Employers and employees contribute, the money is invested, and benefits are paid according to the fund's registered rules.
- Preservation
- Keeping your retirement savings invested when you leave a job, instead of withdrawing them as cash, so they continue to grow until retirement.
- Principal officer
- The person responsible for the day-to-day management of a pension fund and its compliance with the law and the fund's rules.
- Provident fund
- A retirement fund that usually pays all or most of the benefit as a single lump sum at retirement, rather than as a monthly pension.
R
- Remittance
- Payment of deducted contributions by an employer to the pension fund. Late or missing remittances should be reported to the fund.
T
- Transfer
- Moving your benefit from one fund to another, for example into your new employer's fund, without taking it as cash.
- Trustee
- A member of the board that governs a pension fund. Trustees must act in the best interests of members and are expected to meet minimum qualification requirements, such as the Certificate of Proficiency (C.O.P).
U
- Unclaimed benefits
- Benefits that are due but have not been paid because the fund cannot trace the member or beneficiary. Keeping your contact details up to date prevents this.