AA Pension Scheme


Accumulated retirement income (CARE)

Your total retirement income built up to date. It is made up of the sum of each year’s basic amount adjusted by any annual revaluation. On retirement at age 65, this annual amount is paid over 12 months as a monthly pension or part of it.

Active status

The status of a Contributing member. You cease to be of 'Active' status when you opt out of, or otherwise leave the Scheme.

Additional Voluntary Contributions - AVCs

Contributions you elect to pay which are over and above your basic contributions. At retirement, the value of your AVC account can be used to provide you with an additional pension or part of it can be exchanged for a tax free cash lump sum and reduced pension.

Adjusted pensionable earnings

At any given date, the lower of: a) Your actual Pensionable Earnings; and b) Your Initial Amount increased on the 2010 Change Date and subsequently on each 1 April (commencing 1 April 2011) by the salary cap. If the Earnings Cap applies, Post 2010 Final Pensionable Earnings cannot exceed this.

Adult dependant

Any person who, in the opinion of the Trustee, is (or was at the date of your death) financially dependent on you or interdependent with you.

Annual revaluation (CARE)

The revaluation each year that may be applied to your accumulated retirement income and any purchased credits. For members who joined CARE prior to 1 October 2005, each year’s accrued (accumulated) CARE pension is revalued up until retirement in line with Retail Prices subject to a cap of 5%. For members who joined CARE from 1 October 2005, each year’s accrued CARE pension is revalued each year up until retirement on a purely discretionary basis. For all members, benefits earned since 1 July 2010 will automatically be revalued each year up until retirement in line Retail Prices subject to a cap of 2.5%. Such annual revaluation will aim help protect your benefits against inflation.

AVC account balance

The value of your accumulated AVCs.


Basic amount (CARE)

The annual retirement income built up over the CARE year (1 April to 31 March) expressed in £s. It is equal to a percentage of your pensionable pay received over the year.

Basic salary (Staff/Mgt1&2)

Basic annual rate of pay excluding commission, overtime and other varying payments.

Basic State Pension (BSP)

The BSP is based on the National Insurance contributions made by you during your working life. This pension is reviewed by the Government each year and normally increases in line with the Retail Price Index (RPI).

Build rate (CARE)

The percentage used to calculate your basic amount each year. You can choose to vary it each year at 1st April by completing a CARE Build Rate Change form in the Document Library.



Career Average Revalued Earnings. CARE arrangements provide retirement benefits based on each year’s pensionable pay and help protect your benefits against inflation

Change date

This is the 1 July 2010.


A legitimate, legitimised or adopted child who is (unless born after your death) living with you or financially dependent upon you to a substantial extent (as to which the Trustee's decision is final) and who is under age 18 or, if the Trustee decides to treat them as a child, is over age 18 but under age 22 and receiving full time education or vocational training. A child born after you cease to be in pensionable employment does not qualify as a child unless the Principal employer decides otherwise.


The Automobile Association and its subsidiary and associated companies which participate in the AA Pension Scheme. Where applicable this refers to the company that employs you.

Contracted in

This means that both you and the company pay National Insurance contributions at the full rate and you will receive both the Basic State Pension and the State Second Pension in addition to your CARE benefits. CARE is contracted-in. Your State Second Pension benefits may be affected if you participate in AA Plus.

Contracted out

Contracting out for all defined benefit occupational pension schemes ceased with effect from 5 April 2016. Members of a contracted-out pension scheme paid reduced National Insurance Contributions and did not participate in the State Second Pension (S2P) for the period of contracting out.

Contributing member

An employee of the Company who is contributing to the Scheme. Will have an active status.

Current purchased credits (CARE)

Your purchased credits with any annual discretionary increases on these.


Deferred benefit

A benefit left in the Scheme by someone who is no longer a contributing member.

Deferred member

Someone who is no longer a contributing member and is entitled to a deferred benefit.


A person who was financially dependent on you or interdependent with you to a substantial extent immediately prior to your death and to whom the Trustee decides to pay a pension from the Scheme. In determining whether a person was so dependent the Trustee's decision is final.


Early retirement

A member who retires before Normal Retirement Age and has reached age 55 after 6 April 2010, may take a reduced pension at an earlier date with consent of the Employer.

Earnings (Staff)

Basic renumeration, excluding benefits in kind, non-pensionable bonuses and relocation expenses, subject to the Earnings Cap. Where you have been notified in writing by the Principal Employer, this will include certain commisson, overtime and other varying payments except those set out above.

Earnings cap

A limit on the amount of member's earnings on which pension contributions and benefits are based.


Fluctuating emoluments

Are any parts of an employee’s earnings which are not paid on a fixed basis and are additional to the basic wage or salary.


Guaranteed Minimum Pension (GMP) (Staff, Mgmt 1, Mgmt 2)

The minimum amount of pension that the Scheme must pay to satisfy the requirements for contracting out of the State Pension arrangements in respect of Scheme benefits built up before 6 April 1997.


Initial amount

The greater of: - Your Pensionable Earnings in the 12 months ending on 30 June 2010; and - Your Pensionable Earnings in any of the five tax years ending on 5 April 2010

Internal disputes resolution procedure

The scheme’s IDRP is used by the Trustee to consider formally any complaint from a member against the Trustee.


Late retirement uplift (CARE)

The amount your accumulated retirement income is increased if you retire after age 65 having stopped contributions at age 65 (it is determined by the Trustee and depends on your age when you retire).


Minimum pension age

The minimum age that you can take your pension (unless due to ill-health) is age 55.


Normal Retirement Age (NRA)

Age 65 unless stated otherwise.


Pensionable earnings (Staff Full Timers)

Earnings less a deduction equal to the Lower Earnings Limit in force during the period over which earnings are assessed. The Lower Earnings Limit is an amount published each year by the Government (£5,876 for 2017/18) and is very close to the annual basic State Pension for a single person.

Pensionable earnings (Staff Part Timers)

Earnings less a deduction of a proportion of the Lower Earnings Limit, depending on the hours you are contracted to work. For example, if you are contracted to work half the usual standard of 36.25 hours per week, the deduction would be half the Lower Earnings Limit. The Principal Employer determines standard full time hours for this purpose.

Pensionable employment

Complete years and months of Scheme membership, plus any years and months credited to you from another registered pension arrangement for which a transfer payment was received by the Scheme and for which added years were granted.

Pensionable pay (CARE)

Your basic annual salary plus any overtime payments to which you are entitled under your contract of employment (if any) as the principal employer may determine. It is subject to the earnings cap.

Phased benefits (CARE)

Applies to an individual who is either joining CARE having been employed by the Company for 12 months or more OR is rejoining the Scheme after a previous period of membership. Benefits such as life assurance, spouses’ / dependants’ / children’s benefits and ill health benefits will be phased in over a 5 year period. Refer to the CARE Member Guide in the Document Library for more details.

Principal employer

AA Developments Limited.

Purchased credits (CARE)

Additional benefits within CARE secured from transfers-in. These may be revalued in line with any annual discretionary revaluations and are added to accumulated retirement income at retirement.


Retail Prices Index (RPI)

The index compiled by the Government each month to record the movement in prices of regular household expenditure, including mortgages, fuel, food and consumables.


The formal rules of the Scheme which define all your benefit entitlements under the Scheme, and also comprise the Scheme's trust deed. A copy is available from AA Pensions Adminstration, but a small charge may be made to cover any reproduction costs. The Rules will be used to determine benefits and override any other communication or benefit illustration.


Salary cap (staff, mgmt 1, mgmt 2)

From 1 July 2010, increases on growth in pensionable earnings are capped at either 2.5% or 3% per year depending on a one-off decision made by the member to increase their pension contributions by 1.5% or 2.5% of pensionable earnings. An increase to member contributions of 1.5% was linked to a cap on growth in pensionable earnings of 2.5%. An increase to member contributions of 2.5% was linked to a cap on growth in pensionable earnings of 3%.


The AA Pension Scheme


The length of time you have been a contributing member calculated in years and days.


Your husband, wife or Civil Partner (as defined by the Civil Partnership Act) who, at the time of your death, was normally living with you. If you married or entered a civil partnership after your pensionable employment ended, your husband, wife or civil partner would not qualify as your spouse under the Scheme Rules unless the Principal employer decides otherwise.

State pension age

Currently age 65 for men and age 60 for women. From the year 2020, the State Pension Age will be equalised at 65 for both men and women, with this change being phased in from the year 2010.

State Second Pension (S2P)

With effect from 6 April 2002, the State Earnings Related Pension Scheme (SERPS) was replaced by a new State Second Pension (S2P). As CARE is not contracted-out, CARE members will earn S2P benefits payable by the State as well as retirement income under CARE. S2P benefits may be affected if you participate in AA Plus.


Tax-free cash

A cash sum payable at retirement in exchange for part of your accumulated retirement income. HM Revenue & Customs restricts the amount of cash you can have.

Transfer value

A payment made from the Scheme to another pension arrangement, calculated as the amount which needs to be set aside now in order to provide you with a retirement income at age 65 based on your current accumulated retirement income and current purchased credits. It is calculated by the Trustee, based on the advice of the actuary. If you ask, you have the right each year to be told what your transfer value would be under the Scheme.

Transfer-in (CARE)

A payment from an external pension arrangement (occupational, personal or stakeholder) to the Scheme to secure purchased credits. Transfers In are not currently accepted by the Scheme.


A Trustee Company – A.A. Pensions Trustees Limited. The Trustee’s role is to ensure that the AA Pension Scheme is managed according to the Rules, and that its assets are invested prudently in line with the Scheme’s Statement of Investment Principles. Its board is made up of principal employer appointed and member nominated directors, whose names appear in the Scheme’s annual report, which the Trustee publishes each year, and reports on progress over the last year.