A method of pension funding in which contributions are placed with an insurance company and used to purchase annuities when employees retire; in contrast to conventional group annuities, under which the funds are immediately used to purchase units of deferred annuities for all participants. As in the trusteed plan, the insurance company acts as the trustee until annuities are actually purchased. Also known as group deposit administration annuity.
An investment option for occupational defined benefit schemes, whereby an agreed amount of interest is credited to the fund with the possibility of a final declaration of a higher figure being backdated over the interest period e.g. 8% declared at the beginning of the year, an additional 2% granted at the end, backdated.
Type of investment used by defined benefit schemes. Contributions, net of expense charges, are accumulated in a pool. An agreed amount of interest is added. Additional interest may be declared and added to the fund retrospectively for the interest period concerned e.g. 6% added at beginning of year and additional 2% declared at end of year and backdated. Pensions and other benefits are paid from the fund as they fall due.