Pension contributions

The RCPS is a Defined Benefit (DB) scheme.

In a DB scheme the pension accrued is typically based on the employees salary or earnings, an accrual rate and length of service. The pension accrued in the RCPS is not based on or related to the standard pension contributions paid by the member or employer.

The contributions received are used to pay the current scheme pensioners; they do not create an individual pension pot for each member.

The scheme guides explain pension accrual in more detail, we also have further information on our Engagement page and in our recorded webinars. The only contributions that affect individual pension accrual are those related to Added Pension or Added Years purchases.

Standard member (employee) contributions are between 4.6% and 8.05% of pensionable earnings each month, the actual percentage being determined by which pay band applies to the employee.

Pensionable earnings include allowances that are classed as pensionable they do not include, for example, non-consolidated bonus payments.

Full details of pensionable allowances are available from RCPS employers.

In order to work out the pay band that applies each month, your monthly pensionable earnings are multiplied by 12 to obtain the 'Annualised Earnings' figure. It is this figure which is then used for the purpose of assessing which pay band applies for your monthly pension contributions.

Because of this, your contribution rate may change from month to month if your pensionable earnings vary. This variation could be due to a pensionable bonus which may move you from one pay band to another for the month that this payment is made. The contribution rate should revert to the normal annualised earnings amount the following month, unless your pay rise takes you to the next contribution band. From 1 April 2020 backdated pay awards are not factored into the annualised earnings calculation.

The RCPS employee contribution estimator 2024 (Excel, 29KB) - opens in new window can be used to calculate what your monthly contribution might be. This file also includes the previous member contribution rates going back to 2014/15.

The Nuvos Scheme has been used as an example to explain how contributions are used.

The Nuvos pension has a normal scheme pension age of 65 with an accrual rate of 2.3% of your pensionable earnings.

Each year 2.3% of your earnings are added to your Nuvos pension. For example, one year of pensionable earnings of £20,000 will give an annual Nuvos pension of £460 at age 65.

Every year your accrued Nuvos pension is subject to a cost of living increase.

The chart below illustrates how a Nuvos pension builds up:

Bar chart showing how a nuvos pension accumulates over four years by adding an additional 2.3% of your pensionable earnings to a cost of living adjustment and the balance carried forward from the previous scheme year

The cost of living adjustment is assumed to be positive for this illustration.

When you access your Nuvos pension you have the option of exchanging some of your annual pension to create a tax free pension lump sum. You have the ability to increase your retirement income by buying Added Pension or making additional voluntary contributions (AVCs).

Nuvos also provides a number of other benefits such as death benefits and ill health retirement.

The minimum pension age for Nuvos is 55. If you claim it before your normal pension age it will be reduced for early payment. If you take your Nuvos pension after your normal pension age of 65 a late payment supplement is added.