Investments that seek to generate positive returns through active currency trading (primarily using forward currency contracts) from anticipated movements in various foreign exchange rates. Participation in this investment vehicle is largely on an unfunded basis (investments are based on the notional amounts with a small capital commitment or cash required for settlements only).

A member who is making contributions or, if not making contributions, is on non-contributory leave for up to three years on approved disability leave, or at the point of maximum pensionable service (35 years).

These strategies have two forms - security selection or market timing. Security selection is the buying and selling of securities to earn a return above a market index such as the TSE 300 Index for Canadian stocks. Market timing is based on shifting asset class weights to earn a return above that available from maintaining the asset class exposure of the policy asset mix.

The total value of all benefits accrued by pension plan members and other costs for which the pension plan is responsible.

The estimated cost to the pension plan of providing the increased benefits gained by a member who buys or transfers optional service. An actuarial reserve calculation takes into account a number of factors including salary scaling.

A process to determine the financial position of a pension plan at a specified date.

The adjusted value of a pension plan's assets used by the actuary to determine the funded status of the Plan.

A person authorized by their designation as a Fellow of the Canadian Institute of Actuaries to prepare and sign actuarial valuations.

A weighted average measure of the cost of a group of goods and services that are normally purchased by Alberta households. This includes things such as clothing, food, housing, gasoline, health and personal care services, recreation, and education.

Alberta Pensions Services Corporation (APS) is responsible for administering seven statutory pension plans under the direction of four pension boards and the Government of Alberta, as well as two supplementary retirement plans.

The designation of your pension benefits to one or more beneficiary.

If your primary beneficiary or beneficiaries are deceased, your alternate beneficiary or beneficiaries are entitled to your benefits. See also beneficiary and primary beneficiary.

• CPI + 600 from April 2005 to May 2005
• CPI + 600 and CPI + 400 from June 2005 to March 2006
• CPI + 600, CPI + 400 and Goldman Sachs Commodity Index from April 2006 to July 2006
• CPI + 600, CPI + 400, Goldman Sachs Commodity Index and CPI + 800 in August 2006
• CPI + 600, CPI + 400, Goldman Sachs Commodity Index, CPI + 800 and HFRX Global Investable Index (C$ Hedged) from September 2006

A specific type of disability income replacement plan that is offered by an employer for its employees and is approved by PSPP's administrator, Alberta Pensions Services Corporation (APS). Where the LTDI plan is approved by APS, the period of LTDI coverage is considered mandatory service for pension purposes.

The criteria used by APS to approve LTDI plans are:

• All members employed by the employer in the group to whom the LTDI plan applies, except for those who are not eligible for coverage by reason of medical requirements, must be covered by the LTDI plan;
• A member must not be required to apply for a pension as long as the member qualifies for benefits under the LTDI plan; and
• The LTDI plan must be filed with APS.

Types of investments, such as bonds, stocks, real estate and cash.

The percentage of a pension plan's funds allocated to various asset classes (for example, 34.5 per cent fixed income and 65.5 per cent equities) for investment purposes.

Any item of economic value owned by an individual or entity, especially one that could be bought and sold.

A standard against which others are measured. For the purposes of this report, benchmarks are established income indices (listed in percentages) used to measure the health of the Fund's investment returns.

Your pension partner is automatically your beneficiary if you die before retirement. If you do not have a pension partner, the beneficiary is the person(s) you name to receive (a) a benefit if you die before retirement, or (b) the pension payments for the remainder of a guaranteed term if you die after retirement. A beneficiary can be a charitable organization. If you do not have a beneficiary and you do not have a pension partner, your estate is your beneficiary.

A promissory note issued by a company or government which bears a fixed maturity date and rate of return.

The federal pension plan administered by Human Resources Development Canada. It applies in all provinces and territories of Canada except Quebec where the equivalent Quebec Pension Plan applies.

By staying with the same employer and moving to the Management Employees Pension Plan (MEPP) or Universities Academic Pension Plan (UAPP) or vice versa with no break in pensionable service, you become eligible for combined pensionable service, if the move occurred on or after January 1, 1994. This means your service in both plans is combined to determine when you are eligible to receive a pension, your highest average salary, and any early retirement reduction from either plan.

The amount of money paid in a one-time payment that is equal in value to your future pension payments. If you are vested and you stop participating in PSPP before age 55, you are entitled to the commuted value of your pension payable on all service.

A weighted average of the cost of a basket of goods and services that are normally purchased by Alberta households. It includes such things as clothing, food, housing, gasoline, health, personal care services, recreation and education.

Money paid into a pension plan by you and your employer. Your contributions are tax deductible and are made through payroll deduction. All contributions go directly to the PSPP Fund.

An increase in a pension benefit to compensate for an increase in the cost of living. Your pension will increase each January by 60 per cent of the Alberta Consumer Price Index (CPI). The CPI is a weighted average of the cost of a basket of goods and services that are normally purchased by Alberta households. This includes things such as clothing, food, housing, gasoline, health and personal care, recreation, and education. COLA increases are calculated by taking the average of the CPI during the 12-month period ending each October and comparing it to the previous year's 12-month average.

Your current status of employment with your employer, for example, full-time, part-time or terminated (no longer contributing to the Plan).

A member who is no longer employed by a plan employer, has left contributions in the Plan and has yet to choose a pension option.

A pension which starts at some future date.

A plan which pays a monthly pension based on your pensionable salary and length of pensionable service. The formula driven nature of such pension plans allows you to estimate your pension at any time in your career. Unlike other types of pension plans, the investment performance of the pension fund will not affect the calculation of your pension.

To qualify as a dependent minor, a child must be:

• Dependent - financially supported and not married
• Minor - under 18 years of age

An index maintained by Scotia Capital Markets. The index measures the return attributable to 91-day Treasury Bills. DEX Fixed Income Indices was formerly known as Scotia Capital Fixed Income Indices (effective October 22, 2007).

An index maintained by Scotia Capital Markets. Measures the total return attributable to bonds and includes representative bond issues by issuer (Federal, Provincial, Municipal and Corporate), quality (AAA, AA, AA, A, and BBB) and term (short-, mid-, and long-). DEX Fixed Income Indices was formerly known as Scotia Capital Fixed Income Indices (effective October 22, 2007).

The Alberta Investment Management Division of Alberta Finance manages the pension plan fund in accordance with the Board's Statement of Investment Policies and Goals, and applicable legislation. The Fund is invested in equities (both domestic and international), bonds, mortgages and real estate.

Retirement before being eligible to receive an unreduced pension. See normal retirement and postponed retirement.

An economy in the earlier stages of development whose markets have sufficient size and liquidity and are receptive to foreign investment. Examples include China, Greece and Brazil.

Shares of ownership in a corporation that can be publicly or privately traded.

A member's contributions and interest cannot fund more than 50 per cent of the value of a pension. Excess contributions is the amount of member contributions and interest that exceeds 50 per cent of the value of the benefit being paid. Contributions paid and service credited for optional service are not included when calculating excess contributions.

The amount for which an asset could be bought or sold in a free and open market.

• MSCI All-Country World Index to December 2000
• S&P 500 Index and MSCI EAFE Index from January 2001 to June 2001
• S&P 500 Index (C$ Hedged) and MSCI EAFE Index from July 2001 to June 2004
• S&P 500 Index and MSCI EAFE Index from July 2004 to December 2004
• S&P 1500 Index and MSCI EAFE Index from January 2005 to March 2006
• S&P 1500 Index, MSCI EAFE Index and MSCI Emerging Markets Index from April 2006

A fund was established under the legislation governing the PSPP to hold all employee and employer contributions and investment income. All benefits are paid from the PSPP Fund. All assets in the PSPP Fund can only be used to pay the promised benefits and cover administrative costs.

You can choose a pension guaranteed for either 5, 10 or 15 years. Guaranteed-term pensions are paid for your lifetime, but if you die before your guaranteed term has expired, your pension is paid to your beneficiary or estate for the remainder of the term. For example, if you choose a 10-year guaranteed-term pension and die 4 years later, the pension will be paid to your beneficiary for the remaining 6 years.

The average of your five highest consecutive years of salary used to calculate your pension benefits.

Equity whose return is expected to react to changes in interest rates.

An index maintained by the Institute of Canadian Real Estate Investment Managers/International Property Databank that measures the total return on a diversified pool of properties invested in by institutional investors. The IPD All Property Index replaces the Russell Canadian Property Index.

A pension option paid as long as either you or your nominee continues to live. If you choose a joint-life not-reduced pension, on your death your nominee will be paid the same amount you were paid for as long as your nominee lives. If you choose a joint-life reduced-by-one-third pension, the pension to the survivor will be reduced by one-third after your death or the death of your nominee.

Investment in larger capitalized firms. Within Canada, companies with a market capitalization of greater than 0.15 per cent of the total Toronto Stock Exchange market capitalization.

A period of service during which a member is, with the approval of the employer, on leave from all or a portion of their regular duties of employment and is receiving pensionable salary that is less than regular pensionable salary from the employer. During periods of leave with partial salary, member and employer contributions to the pension plan are required.

The PSPP liability is the total value of all benefits earned by PSPP members and other costs for which the PSPP Fund is responsible.

A type of RRSP that is locked-in and must be used to provide you with a lifetime income anytime after age 50. Most financial institutions offer LIRAs.

A type of disability insurance offered by an employer for employees who become unable to perform their normal work because of a physical or mental disability. If the LTDI plan is approved by PSPP's administrator, Alberta Pensions Services Corporation (APS), the period of LTDI coverage is included as service for pension purposes.

Manager structure refers to the number and mandates given to a plan's investment managers. Manager structures can be built around balanced fund mandates where the manager invests across multiple asset classes (Canadian stocks, Canadian bonds, US and International stocks) or specialty mandates where the manager invests in a single asset class. In the case of a specialty mandate the focus can be very specific such as investing in only Canadian small capitalized companies.

Marital status can be single, married, common-law, separated, widowed or divorced. See "Pension Partner" for further information.

If a marriage ends, the Court will treat the pension asset as one of the items to be considered when property is divided. A Matrimonial Property Order (MPO) is a court order under the Alberta's Matrimonial Property Act or similar legislation outside Alberta. A pension can only be divided when an MPO is filed with PSPP's administrator, Alberta Pensions Services Corporation (APS).

The unique number assigned to you by Alberta Pensions Services Corporation's (APS) pension administration system. The Member ID is printed on publications sent after January 2004, including your annual statement, enrolment package or benefit estimate package.

Your status under the Plan. See active member, deferred member and suspended member.

An index maintained by Morgan Stanley, the index is compiled and reported monthly in local and common currencies. Measures the total return attributable to the largest capitalized companies on the world's major stock exchanges.

mypensionplan is a secure website that provides active members and deferred members of the Public Service Pension Plan with access to personalized pension information.

The person you name to receive your joint life pension if you die first. Your nominee must be a person eligible under the federal income tax rules. If you have a pension partner on the effective date of your pension, the nominee must be your pension partner unless they sign a waiver before pension commencement.

The normal form of pension uses the prescribed retirement formula to come up with the basic pension amount. At present the normal form of pension is a single life pension guaranteed for five years. All other optional forms of pension are the actuarial equivalent of the current normal form.

Retirement at exactly age 65. See early retirement and postponed retirement.

The basic federal income security program for seniors who are age 65 and older.

Previous employment during which you did or did not belong to a pension plan. You may be able to buy this period of service if you are not receiving a current or future pension from your former employer. (Only some types of service are eligible.) By buying optional service you can increase your length of pensionable service thereby increasing your future benefits.

Equity bought as Toronto Index Participation Units (TIPS), allowing a fund to buy into the top 35 companies on the Toronto Stock Exchange.

These strategies involve investing to replicate the performance of a given market index such as the TSE 300 Index for Canadian stocks, or managing asset class exposure to match the performance of an established policy asset mix such as 50 per cent TSE 300 Index and 50 per cent Scotia Capital Markets Bond Universe Index.

A "pension partner" means:

(i) a person who, at the relevant time, was married to a participant or former participant and had not been living separate and apart from him or her for 3 or more consecutive years, or

(ii) if there is no person to whom subclause (i) applies, a person who, as at and up to the relevant time, had lived with the participant or former participant in a conjugal relationship

(A) for a continuous period of at least 3 years, or

(B) of some permanence, if there is a child of the relationship by birth or adoption.

For the purposes of this definition, persons are living separate and apart

(a) if they are living apart and either of them has the intention to live separate and apart from the other, or

(b) if, before the relevant time,
(i) they had been living separate and apart for any period, and

(ii) that period was interrupted or terminated by reason only that either of them became incapable of continuing to live separate and apart or of forming or having the intention to continue to live separate and apart of that person's own volition, and the separation would probably have continued if that person had not become so incapable.

Your basic pay for the performance of your regular duties. This includes pay for shift work, weekends and acting pay if the employer treats it as pensionable salary under the employer's salary policy and if it is paid on a uniform and consistent basis. Pensionable salary does not include earnings such as expense allowances or overtime payments.

Your years of service during which you contribute to the pension plan, plus service recognized from a transfer or purchase of optional service. The maximum length of pensionable service you can accumulate in the Plan is 35 years.

A member, surviving pension partner, or beneficiary who is receiving a pension from the Plan.

A period of service during which a member is, with the approval of the employer, on leave from their regular duties in order to be employed on a full-time basis by a certified bargaining agent.

A mathematical analysis of the financial condition of a pension plan. An actuary prepares a plan valuation at least once every three years. Following a valuation, the Board may adjust contribution rates so the rates meet the funding requirements of the Plan.

A benchmark return for the Fund which is composed from the long-term asset mix policy and the benchmark indices for each major asset class.

Outlined in the Statement of Investment Policies and Guidelines (SIP&G); reflects an optimal long-term asset mix made up of broad market indices. The PSPP's actual investment performance is measured against this policy benchmark portfolio.

Portable Document Format (PDF) is a format used to deliver documents over the Internet. Adobe® Reader® (TM) is the standard software used to access PDF documents and can be downloaded, for free, from the Adobe® website.

Retirement after age 65 or after the age of entitlement to an unreduced pension. See also early retirement and normal retirement.

The pension partner may waive their right to a lifetime pension by completing the Pension Partner Waiver of Pre-Pension Commencement of Death Benefit. This allows the pension to be paid to the beneficiary or beneficiaries on file with APS instead of the pension partner. This waiver can be completed by the pension partner any time before pension commencement but it may only be rescinded by the pension partner prior to the member's death.

If you do not have a pension partner, your primary beneficiary is entitled to your benefits if you die before retirement or before the expiry of a guaranteed term. See also beneficiary and alternate beneficiary.

The real rate of return is the return achieved by an asset after adjustments for inflation.

• Russell Canadian Property Index to December 2002
• IPD All-Property Index from January 2003 to December 2004
• IPD Large Institutional All-Property Index from January 2005

A fixed income investment product (a bond) whose return is linked to the real interest rate to generate a specified real rate of return. Related Terms: The real interest rate is the nominal (set) interest rate minus inflation.

An agreement negotiated with another pension plan that allows members to transfer their pension entitlements when they move between plans. By transferring pension entitlements, you may increase your pension income.

An agreement negotiated with another pension plan that allows members to transfer their pension when they move between plans.

You can retire any time after you reach age 55 if you have at least two years of service. Your pension will be reduced by three per cent for each year you retire early. This reduction will be based on your years short of 65, or your years short of 85 points, whichever gives you the higher pension.

A type of tax-deferred investment that is set up to hold and invest your savings until you retire. Most can be withdrawn at any time, but you will be taxed on the amount withdrawn.

An index maintained by Frank Russell. Measures the total return attributable to Canadian commercial real estate.

An index maintained by the S&P/TSX Canadian Index Policy Committee that measures the total return on the largest companies that trade on the Toronto Stock Exchange. (Formerly the TSE 300)

Covers 500 industrial, utility, transportation and financial companies of the US markets, mostly on the New York Stock Exchange issues.

(Pensionable Salary) - Your basic pay for the performance of your regular duties. This includes pay for shift work, weekends and acting pay if the employer treats it as pensionable salary under the employer's salary policy and if it is paid on a uniform and consistent basis. Pensionable salary does not include earnings such as expense allowances or overtime payments.

The salary cap is the maximum salary upon which a defined benefit can be based and is set under the federal Income Tax Act.

See pensionable service.

The year specified by the employer as the employer's annual payroll pay period cycle. This is the year for which members' pensionable service is reported by the employer and which will have specific From and To dates. The service year may not coincide exactly with the calendar year.

Investment in smaller capitalized firms. Within Canada, companies with a market capitalization of less than 0.15 per cent of the total Toronto Stock Exchange market capitalization.

A nine-digit number used in the administration of various Canadian government programs. You require a SIN to work in Canada or to receive government benefits.

See pension partner.

A policy document set by the PSP Board to establish the asset mix of the Fund, how the assets may be invested, and the holding limits for each specific type of security.

A policy document set by the PSP Board to establish the asset mix of the Fund, how the assets may be invested, and the holding limits for each specific type of security.

A surplus exists when the actuarial valuation determines the Fund's accrued benefit payments are less than the net assets available for the payment of those benefits.

When a member has a Combined Pensionable Service (CPS) relationship, the term "suspended" describes the member's status in the Plan(s) to which the member is no longer contributing. For example, a MEPP member who moved from PSPP (forming a CPS relationship) is deemed "suspended" in PSPP, since they are no longer actively contributing to PSPP.

A contract between two parties to pay the other party the return on an underlying investment.

Short-term government security.

An active management strategy that alters the portfolio weights of the asset mix in an attempt to capitalize on short-term anomalies in global financial markets on an opportunistic basis. Synthetic investments such as equity index and fixed income futures or swaps and forward currency contracts are often used to obtain desired exposures. Participation in this investment vehicle is largely on an unfunded basis (investments are based on the notional amounts with a small capital commitment required for the "margin" account only).

When a member leaves the Plan, taking his or her benefits as a lump sum payment.

This index is composed of the 300 largest capitalized companies that are traded on the Toronto Stock Exchange.

Being vested means you are eligible to receive a pension at retirement. If, as a vested member, you leave PSPP, you are entitled to the value of the pension you have earned, half of which must come from the employer's share of contributions. You become vested when you have two years of combined pensionable service.

The date on which the employer issues a member's pay for a particular pay period. Pension contributions for a particular pay period must be remitted to Alberta Pensions Services Corporation (APS) within 15 days of the withholding date.

The year in which the employer withheld contributions that were remitted to the pension plan.

The Canada Pension Plan (CPP) sets a maximum amount of earnings on which you can contribute to the CPP. The YMPE is used by your pension plan in determining contribution rates, benefits, and the cost of service.