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Vested vs Accrued

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
 
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