In the RPS there are a few different terminologies used when it comes to pay.
Outlined here are the definitions of each and how they relate to your RPS pension benefits.
Pensionable Pay
In the RPS, this is your yearly rate of pensionable pay as at 1st April each year.
Since July 2012, members of the Network Rail Section of the RPS have been subject to a Pensionable Pay Cap. This effectively caps the amount that an RPS members Pensionable Pay can increase each year.
Initially, the Pensionable Pay Cap was introduced to be in line with the Retail Price Index (RPI) plus 0.5%. However, the additional 0.5% was removed in April 2016.
The Pensionable Pay Cap means that if you receive a pay award above the Pensionable Pay Cap, the amount your Pensionable Pay increases is limited by the Pensionable Pay Cap for that year.
For example, if the Pensionable Pay Cap is 2% and you receive a pay award of 5%, for that year your Pensionable Pay for RPS pension purposes would only increase by 2%.
Similarly, if you receive a pay award which is lower than the Pensionable Pay Cap in place for that year, your Pensionable Pay would increase by the full pay award.
The Pensionable Pay Cap covers a twelve month period (1st April to 31st March) so if you receive multiple pay awards in a given year, depending on the value of each pay award, you could use up all the Pensionable Pay Cap with the first pay award. That would mean that any subsequent pay award(s) would be in excess of the Pensionable Pay Cap, and therefore the increase(s) would not be applied to your Pensionable Pay.
Due to the Pensionable Pay Cap, there may be an instance where your Pensionable Pay used for RPS pension purposes is as lower than the actual salary you receive from Network Rail.
On the other hand, if your Network Rail pay reduced, both your RPS pension benefits and RPS contributions will continue to be based on your highest Pensionable Pay in force as at 1st April.
For example, you decide to change roles at Network Rail which results in your Pensionable Pay reducing from £30,000 to £27,000 per annum. Your RPS pension benefits and RPS contributions would still be based on £30,000 per annum, until such a time when your Pensionable Pay increases above £30,000.
Section Pay
This is your Pensionable Pay (including all Pension Restructuring Premiums (PRPs)) on 1st April, with a reduction applied for the Basic State Pension as at 1st April (BSP Deductor).
The BSP Deductor for RSP60 is 150% of the Basic State Pension.
The BSP Deductor for RPS65 is 75% of the Basic State Pension.
Section Pay is what your RPS contributions are based upon.
Your Section Pay will never be less than half of your Pensionable Pay (including all Pension Restructuring Premiums (PRPs)).
Final average Pensionable Pay
This is your Pensionable Pay averaged over the 12 months before you take your RPS pension benefits, leave the Network Rail Section of the RPS, or die, whichever is earlier.
You Final average Pensionable Pay is the figure used in the calculation of your RPS pension benefits before the Basic State Pension Deductor (BSP Deductor) is applied.
Pension Restructuring Premium (PRP)
Should your pay increase due to a promotion, which involves a change in Band at the numerical level (i.e. from Band 5 to Band 4), irrespective of the Pensionable Pay Cap, the full value of your promotion will create a Pension Restructuring Premium (PRP), and would be treated as pensionable for future service only.
For example, you receive a promotion on 1st April 2022 from your original Band 5 role with a salary of £20,000, to a Band 4 role with a salary of £30,000.
The full value of your promotion, £10,000, will create a PRP Tier, which will be added to your RPS pensionable service from 1st April 2022 up to your retirement date.
For a more information about Pension Restructuring Premiums (PRPs) and how they affect your RPS pension, please read the Pension Restructuring Premiums (PRPs) factsheet.