cash equivalent


cash equivalent
A method which can be used to calculate a transfer payment from a salary-related pension scheme (salary-related scheme). A member of a final salary pension scheme (final salary scheme) who is not currently drawing a pension and who has more than 12 months to go before attaining the scheme's normal retirement age, has a statutory right to take a cash equivalent transfer value (CETV) to another registered pension scheme approved pension scheme or buy-out policy (section 93A, Pension Schemes Act 1993). The CETV must be calculated in accordance with the guidelines laid down in actuarial guidance note GN11 adopted by the Board for Actuarial Standards (and originally issued by the Pensions Board of the Faculty and the Institute of Actuaries).
+ A method which can be used to calculate a transfer payment from a salary-related pension scheme. A member of a final salary pension scheme who is not currently drawing a pension and who has more than 12 months to go before attaining the scheme's normal retirement age, has a statutory right to take a cash equivalent transfer value (CETV) (www.practicallaw.com/7-206-3997) to another registered pension scheme approved pension scheme or buy-out policy (section 93A, Pension Schemes Act 1993).
Until 1 October 2008, CETVs were calculated in accordance with the guidelines laid down in actuarial guidance note GN11 adopted by the Board for Actuarial Standards (and originally issued by the Pensions Board of the Faculty and the Institute of Actuaries). However, the legislation relating to CETVs changed on 1 October 2008. CETVs are now calculated by trustees, after obtaining actuarial advice, and GN11 is no longer in force. The Pensions Regulator has issued guidance on calculating transfer values.
USA
Highly liquid (liquidity), low-risk and low-return instruments or investments. Examples of cash equivalents include money market instruments, treasury bills, short-term government bonds, marketable securities and commercial paper. They mature within three months compared to short-term investments that mature in 12 months and long-term investments that mature in over 12 months. These are typically investments that are negotiated and permitted under a loan agreement.
Related links

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

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  • cash equivalent — noun a highly liquid debt instrument with maturities of less than three months • Hypernyms: ↑debt instrument, ↑obligation, ↑certificate of indebtedness • Hyponyms: ↑commercial paper …   Useful english dictionary

  • cash equivalent transfer value — (CETV) A member of a salary related scheme who has more than 12 months to go before attaining the scheme s normal retirement age has a statutory right under the Pension Schemes Act 1993 to take a cash equivalent transfer value (CETV) to another… …   Law dictionary

  • cash equivalent doctrine — Generally, a cash basis taxpayer does not report income until cash is constructively or actually received. Under the cash equivalent doctrine, cash basis taxpayers are required to report income even though no cash is actually received in a… …   Black's law dictionary

  • cash equivalent doctrine — Generally, a cash basis taxpayer does not report income until cash is constructively or actually received. Under the cash equivalent doctrine, cash basis taxpayers are required to report income even though no cash is actually received in a… …   Black's law dictionary

  • Cash-equivalent items — Temporary investments of currently excess cash in short term, high quality investment media such as treasury bills and Banker s Acceptances. The New York Times Financial Glossary …   Financial and business terms

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  • current cash equivalent — CCE In continuously contemporary accounting, the measure of assets and liabilities …   Accounting dictionary

  • equivalent — e‧quiv‧a‧lent [ɪˈkwɪvlənt] noun [countable] something that is equal in value, amount, quality etc to something else: • The Japanese bank had the equivalent of $131 billion in assets on March 31. equivalent adjective : • It must issue 5 million… …   Financial and business terms

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