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The following terms, relating to the Scottish Teachers Superannuation Scheme (STSS), andpensions in general, are used within this pack.Annuity and Annuity Rates An annuity is a contract to pay regular pension payments.An AVC/FSAVC scheme builds up a fund which is used at retirement to buy an annuity andthe annuity rate is the rate at which the capital sum is converted into regular pensionpayments which usually continue until the pensioner dies.Award of Benefits Benefits from the STSS are awarded by SPPA following receipt of aclaim on the appropriate form. Forms can be downloaded from the SPPA websitewww.sppa.gov.ukChild A child, to be eligible for benefits in terms of the STSS, must be dependent on theteacher and, at the time of the death of the teacher, must be:(i) under age 17 or continuing in full-time education until age 23;(ii) under age 19 and not engaged in full-time work or in receipt of Income Support;or(iii) a person who is unable to earn his or her living for health reasons.Contracting Out Most occupational pension schemes are contracted out of SERPSor S2P. This means you pay a lower national insurance contribution but pay into anoccupational or private pension plan.Defined Benefit Scheme Another name for a salary related scheme where thebenefits are set as a proportion of pay at or near retirement.Defined Contribution Scheme Another name for a money purchase scheme, where noguarantees are made of the level of benefits at retirement, which will depend on the levelof contributions, investment returns and other factors.Final Salary Pension Scheme A defined benefit scheme where the pension is based onsalary at or near retirement.Money Purchase Pension SchemeSee defined contribution scheme.Nomination Nomination is the process whereby a teacher indicates to SPPA that he orshe wishes, following his or her death:(i)(ii)to provide pension benefits to a certain close relative who is financiallydependent on him or her; and/orto have the death in service lump sum paid to a particular person.Separate nominations are required, one for pension benefits to a close relative andanother for the death in service lump sum. The relevant forms are available from SPPA orEIS Headquarters.Pensionable Employment Pensionable employment is any employment, underwhatever type of contract, during which superannuation contributions have been paid tothe STSS.Qualification for Benefits A teacher will be entitled to pension benefits consisting of apension and tax-free lump sum provided that he or she:(i)was employed in pensionable employment on 6 April 1988 and has beenemployed in such service, whether before or after that date, for at least 2 years;or101September 2012