Pensionable earnings meaning

What was the background to the consultation? What was proposed? On 14 November 2024, the DfE opened a consultation examining adjustments to member contribution rates and the extension of Fair Deal to further education institutions within the TPS. The department requested feedback on potential increases to member rates after the 2020 scheme valuation indicated a lower-than-expected member contribution yield. In the TPS, members collectively are expected to contribute 9.6% of pay across the entire membership — the ‘member contribution yield’ — yet the 2020 estimate came in at 9.45%. The consultation papers highlighted that, if contribution rates were left unchanged, the resulting shortfall in member payments would need to be met by employers and, in the end, the taxpayer. Consequently, the DfE consulted on keeping the current six-tier contribution model, while raising the member contribution rates for tiers 2 to 6 by 0.3 percentage points to address the deficit. The tiered system operates by allocating pensionable earnings into defined bands, with a specified contribution rate applied to each...

Hymans Robertson, commenting on 8 July 2025 to the Ministry of Housing, Communities and Local Government (MHCLG) consultation, said the suite of proposals for the LGPS in England and Wales is positive, yet their rollout must be appropriately timed. MHCLG opened the consultation in May 2025, setting out a number of suggested reforms to the LGPS, such as making all maternity, shared parental and adoption absence automatically pensionable for scheme members. Whitehall also suggested revising the definition of child-related leave so staff can accrue pensionable pay during the final 13 weeks of the full 52-week period, which currently does not count towards pension. In addition, the package would confirm that any unpaid leave shorter than 30 days should be treated as ordinary pensionable earnings, alongside a range of other measures...

Ministry of Justice (MoJ) On 30 September 2025, the Ministry of Justice (MoJ) revealed it had found at least 500 cases where the appropriate level of pension contributions was not collected from members of the judiciary. It has begun a consultation on new regulations that would permit it to recover the unpaid sums, either via a lump-sum payment or by making further deductions from salary or pension income. In its consultation statement, it said the amendments are intended to expand the range of powers available to the Ministry of Justice to obtain pension contributions from members of the judicial pension schemes. The mistakes arose when either a judicial office-holder was not correctly enrolled into the judicial pension scheme, or when a cap on pensionable earnings was applied incorrectly to a member of the scheme...

What is the Teachers’ Pension Scheme? The Teachers’ Pension Scheme (TPS) is a statutory public service pension arrangement for members of the teaching profession in England and Wales. Since 1 April 2015, the TPS has consisted of two schemes: The reformed TPS (often described in TPS literature as the ‘2015 Scheme’), established on 1 April 2015 under the Public Service Pensions Act 2013 (PSPA 2013) as a career average revalued earnings (CARE) scheme. This Practice Note concerns that scheme. The legacy TPS, created by the Superannuation Act 1972 (SA 1972) as a final salary scheme for those who joined before 1 April 2015. It closed to future accrual on 31 March 2022, while retaining a final salary link within that scheme. For more, see Practice Note: The legacy Teachers’ Pension Scheme. Separate schemes operate in Scotland and Northern Ireland and are outside the scope of this Practice Note. When the reformed TPS launched, the government acted to close the legacy TPS to...

What is the National Health Service Pension Scheme? The NHSPS is an unfunded public service occupational pension that delivers salary‑related, defined benefit (DB) retirement provision for health service staff. The reformed NHSPS (often termed the ‘2015 Scheme’) began on 1 April 2015 as a career average revalued earnings (CARE) arrangement. New starters since that date have joined this scheme, which is the focus of this Practice Note. The legacy NHSPS (the ‘1995/2008 Scheme’) consists of two separate final salary sections—the 1995 Section and the 2008 Section—both closed to future accrual, while preserving a final salary link within that scheme. For further details, see Practice Note: The legacy National Health Service Pension Scheme. There are distinct schemes in Scotland and Northern Ireland, which are not covered by this Practice Note. When the reformed NHSPS opened, the government acted to close the 1995 and 2008 Sections to future accrual, subject to: ...

The concept Historically, under contracted-out salary-related (COSR) schemes, a deferred member’s guaranteed minimum pension (GMP) could be uprated with no rise in the overall deferred pension. This was achieved by cutting the element above the GMP so that the total stayed unchanged, in effect using the excess to fund the GMP revaluation. That practice is termed ‘franking’; ‘anti-franking’ describes the statutory bar on it, which requires a floor of benefit—the ‘relevant aggregate’—for members, and for their spouses and civil partners, at GMP age. Consequently, schemes must preserve the pension above GMP and raise the member’s total pension, rather than trimming the excess. At GMP age, schemes must meet the relevant aggregate for members, spouses and civil partners by safeguarding the excess and increasing totals...