Hi Snowy
These terms are given various specific technical definitions in UK legislation. But broadly speaking, vested benefits are considered to be:
- for active members, the benefits to which they would be entitled unconditionally if they were to leave active service eg a deferred pension
- for deferred pensioners, their deferred pension
- for pensioners, their pension.
Accrued benefits are the benefits for service in a scheme up to a given point in time, whether vested or not.
In many cases accrued benefits are similar to or the same as vested benefits. However, one situation where a difference commonly arises is with active members:
- as mentioned above, vested benefits for an active member are the benefits to which they would be entitled if they left service now eg a deferred pension.
- an active member's accrued benefits are their benefits based on service up to now, but they may be based either on the member's current salary or their salary projected to retirement
Last edited: Mar 11, 2010
