Glossary

Units

In investment terms, all funds are divided into smaller parts called units. When you make contributions, these are used to buy units in that particular fund. The unit price reflects how much each unit held by a member is worth from day to day. Units are priced daily. So if you have 10 units worth £1 each on the day they’re sold, they’ll be worth £10 in total. You can find out more on the fund prices and performance page.

Under-funded scheme

When a pension scheme's assets (incomings) are less than its liabilities (outgoings).

Valuation

The calculation of a Fund’s assets (incomings), liabilities (outgoings) and overall funding position at a given point in time.

The Trustee is legally required to carry out a formal valuation, also known as an actuarial valuation, every three years and to provide a report to The Pensions Regulator of its funding position. You can read more on the valuation page.

Whistleblowing (pensions)

The requirement (under the Pensions Act 2004) on trustees, administrators, professional advisers and employers to inform the Pensions Regulator of breaches of law relevant to the running and administration of a scheme.

Yearly pension

This is the pension that will be payable at your retirement date.

Pay

This is the amount of salary your employer decides will be used to calculate your pension benefits. This may not always match your annual salary. Your Pay might change at any time during the year.

Pension Administrator

Pension administrators handle the day-to-day running of pension schemes. Railpen is the administrator for the British Transport Police Force Superannuation Fund (BTPFSF).

Pension Increase(s)

When you start taking your pension, the amount you get will increase every year to keep up with inflation. The way we calculate these increases is set by the government. At the moment, BTP Fund pensions increase in line with the Consumer Price Index. Find out more on the pension increase page. 

Pension Protection Fund (PPF)

The Pension Protection Fund (PPF) pays compensation to members of eligible defined benefit (DB) pension schemes, when there is a qualifying insolvency event in relation to the employer and where there are insufficient assets in the pension scheme to cover PPF levels of compensation.

Pensionable Pay

This is the amount of your Pay on joining the Fund and is reviewed as at 1 April every year. Your Pensionable Pay remains fixed until the following 1 April when it is next reviewed. This may be capped at certain levels in some sections. 

Pensionable Restructuring Premium

This is the yearly amount of each Restructuring Premium (calculated on 1 April each year). This is mainly used to work out your contributions. If you have more than one Restructuring Premium, you will have more than one Pensionable Restructuring Premium.

Personal Retirement Account (PRA)

For members who pay Additional Voluntary Contributions (AVCs), your Personal Retirement Account (PRA), also known as your pension pot, is the total value of your pension at any point in time. It’s made up of all the money you and your employer have put in, plus government top-ups and growth in the value of your investments. It doesn’t include the State Pension.

Preserved member

A person who is no longer paying into their employer's pension scheme, but has benefits in it that they have not yet claimed. Also known as a 'deferred member'.

Registered pension scheme

A pension scheme that is registered with HMRC and satisfies its requirements. The BTP Fund is a registered pension scheme.

Restructuring Premiums

Restructuring premiums are an element of a member’s Pay that is used to work out their pension benefits. They are applied to your pension when your employer restructures your pay or new parts of your pay become ‘pensionable’. From this point onwards, your new restructuring premium will be used to help work out your pension and lump sum. You might have several different restructuring premiums.

Retirement

The period of time after you stop working and take your pension.

Salary sacrifice

This is an arrangement between you and your employer. You give up part of your pay, and your employer pays this amount into your pension pot instead. You might see this referred to as ‘salary sacrifice’ or ‘SMART’. Both you and your employer potentially save on National Insurance contributions with such an arrangement.  

Section Pay

This will depend on the rules of your Section. However, for most sections:

• This is your Pensionable Pay less 1.5 times the single person's Basic State Pension. Your pension contributions are based on this amount.

• Your Section Pay will never be less than half of your Pensionable Pay plus your pensionable Restructuring Premium(s).

State Pension

An income paid by the government once you reach State Pension age. There are 2 main versions - the new State Pension and the old State Pension. These are explained below. You can also learn more on the State Pension page and the  Gov.uk website.

New: The new basic State Pension is paid to those who reach State Pension age on or after 6 April 2016. The amount an individual receives can vary, depending on National Insurance contributions or credits. You need at least 10 qualifying National Insurance years to qualify for any of the new basic State Pension.

Old: The old basic State Pension is paid to those who reached State Pension age before 6 April 2016. The amount an individual receives can vary, depending on National Insurance contributions, or credits and any paid by a spouse or civil partner.

Tapered Annual Allowance

The Annual Allowance is currently £60,000 for most people. But for high earners, the Annual Allowance reduces on a sliding scale called the Tapered Annual Allowance.

The Tapered Annual Allowance will currently apply to you if:

• your ‘threshold income’ is over £200,000. This is your total taxable income;
• your ‘adjusted income’ is over £260,000. This is your total taxable income plus contributions that you have paid into all registered pension schemes.

For every £2 of adjusted income over £260,000, your Annual Allowance will reduce by £1. The minimum Annual Allowance is £10,000.

You can contact Railpen if you think you may be affected. For more information check the  guide to the Annual Allowance.

Target Retirement Age (TRA)

If you choose to invest in a Lifestyle strategy, you should set a Target Retirement Age (TRA). This is essentially the age that you are planning to take your pot BRASS or AVC Extra.  It can be different from your Normal Retirement Age (NRA).

Tax Relief

Tax relief means some of your money that would have gone to the government as tax, goes into your pension instead.  See the pension tax limits page for more details. 

The Pensions Ombudsman

An institution set up to investigate complaints regarding UK pensions. Visit pensions-ombudsman.org.uk.

The Pensions Regulator

The Pensions Regulator (TPR) is the UK regulator of work-based pension schemes. It works with trustees, employers, pension specialists and business advisers, giving guidance on what is expected of them.

Trivial Commutation 

You may be eligible to exchange all your pensions for a one-off cash payment. To do this, you must be over age 55 and the value of your pension benefits from all registered schemes must not be over £30,000. This doesn’t include the State Pension. The first 25 per cent will be paid to you tax-free, and the remaining 75 per cent will be taxed at your marginal rate of income tax. 

Trustee

A trustee is a person or company, acting separately from the employer, who holds assets in the trust for the beneficiaries of the scheme. Trustees are responsible for ensuring that the pension scheme is run properly and that members' benefits are secure. You can read more about the Fund Trustees in the Trustee area of the website. 

TUPE

A Transfer of Undertakings (Protection of Employment) or ‘TUPE’ is the legislation intended to protect employees after a business is sold and employees are transferred to a new employer.

Late retirement

You may be able to postpone taking your benefits up to the maximum age of 75. Your benefits will be 'preserved'. If you elect to defer payment of your benefits, late retirement factors (LRFs) will be applied. For more details see the when to retire page.

Liability Driven Investments

Liability Driven Investments (LDIs) is an investment approach used to reduce the volatility of funding level within an actuarial valuation. The approach can help to aim to make sure pension promises are paid in full.

Level Pension

A level pension is an option you can choose if you’d like to start taking your Fund pension before your State Pension Age. It’s a way of levelling out the total income you get before and after you start claiming the State Pension. It means you’ll get a higher Fund pension before you claim your State Pension. Then, once you reach State Pension age, you’ll get a lower Fund pension.

Lifestyle strategy

Lifestyle strategies build your pension savings while you’re still working and reduce the risk of a fall in value as you near retirement. They do this by  investing in a selection of underlying funds and changing your allocation to each fund as you get closer to your ‘target retirement age’ (TRA). Find out more on the how investments work page.

Lifetime Allowance

The Lifetime Allowance (LTA) was the maximum amount you could save into all your pensions throughout your working life before you had to pay tax. The LTA for the tax year 6 April 2023 to 5 April 2024 was £1,073,100. You would have paid tax on any pension savings you had that were over the LTA limit. The amount of tax you owed depended on your income tax rate, rather than the LTA charge that was in place before 5 April 2023 and has now been abolished. From 6 April 2024, a limit of £268,275 was introduced on the amount you can take as a lump sum when you take your pension. This limit may not affect you if you have Lifetime Allowance protections.

Lump sum

When you take your Fund pension or pension pot you can choose to take a lump sum in cash. You may be able to tax up to 25% of your pension benefits as a lump sum, tax-free. This is up to a maximum of £268,275 (unless you have a higher protected amount).

Managed fund

A fund, comprising of a mixture of equity, property, fixed-interest investments, along with cash, which are managed. Units are issued to investors.

Member-Nominated Trustee

A trustee chosen by the members of an occupational pension scheme. You can read more about Trustees of the RPS in the Trustee area of the website.

Money Purchase Annual Allowance (MPAA)

If you start to take money from a defined contribution pension pot, the amount that can be contributed to your defined contribution pensions while still getting tax relief on might reduce. This is known as the Money Purchase Annual Allowance or MPAA. The MPAA is currently £10,000.  You can read more about the MPAA and when it might be triggered on the tax limits page.

Money Purchase pension

Another name for a defined contribution (DC) pension. See the definition of defined contribution for more details.

Multi-employer pension scheme

A pension scheme in which more than one employer participates, such as the Fund.

National Insurance contributions

National Insurance contributions are a tax on earnings paid by employees and employers. They can help to build your entitlement to certain benefits such as the State Pension and other State benefits. 

Nominations

By completing a nomination form you can let the Trustee know who you’d like to get a lump sum if you die before taking your pension / pot. The Trustee does not have to follow your wishes, but must take them into consideration. Please see the  nominations for death benefits page for details.

Nominees

The people, charities or organisations chosen or ‘nominated’ by you to receive any death benefits from the pension scheme if you die before claiming your pension. You can nominate online (when you sign into your myFund account) or by submitting a form. Read more in the nominations definition above and on the  nominations for death benefits page. 

Non-eligible jobholder

A worker who is not eligible to be automatically enrolled but who can 'opt in' to a pension scheme if they choose.

Normal Retirement Age (NRA)

The age from which you can retire without any reductions to your pension. For more details see the when to retire page

Offsetting

The amount of pension benefits that are deducted from the value of other assets, such as cash, a car or family home, upon divorce.

Opting in

Employees who are not automatically enrolled into a pension scheme can ask their employer to enrol them in it. This process is known as ‘opting in’.

Opt-out form

The form an employee must complete in order to opt out of an automatic-enrolment scheme.

Opt-out window

The one-month period after a worker has been auto-enrolled when they are able to leave a scheme and have their contributions returned.

Final Average Restructuring Premium

Final Average Restructuring Premiums are used to work out your benefits and will be whichever is greater between:

• the average of your Restructuring Premium(s) over the 12 months before you take your benefits, leave the Section, or die (whichever is earlier)

or

• the average of your Pensionable Restructuring Premium(s) over the 12 months before you take your benefits, leave the Section, or die (whichever is earlier).

If you have more than one Restructuring Premium, you will have more than one Final Average Restructuring Premium.

Final salary pension scheme

A type of defined benefits pension scheme where benefits are based on a member's service and salary close to retirement.

Financial Conduct Authority (FCA)

The FCA is the organisation responsible for regulating advice on pensions, and registering firms and individuals.

Fund

A fund is a way to invest money. Depending on what type of fund it is, your money could be invested in property, shares in companies, bonds or a mixture of different types of financial products.

Fund Manager

A professional who runs an investment fund and decides which shares, bonds or gilts the fund should invest in.

Future BRASS funds (plus growth)

The amount of extra BRASS funds that you could build up in the future with different contributions, plus a projection of how much it could be worth in the future.

Gilt

A bond issued through the United Kingdom Treasury and guaranteed by the British government, widely used by pension funds.

Governance Risk

The risk that falls on the Trustees of a pension scheme to look after it and run it properly.

Guaranteed Minimum Pension (GMP)

Guaranteed Minimum Pension (GMP) is the minimum amount of pension promised to members of pension schemes that contracted out of the State Earnings Related Pension Scheme (SERPS). You may have a GMP if you were a member of the RPS between 6 April 1978 and 5 April 1997.

Hedging

Reducing risk by making an investment that offsets existing or expected risks.

His Majesty's Revenue & Customs (HMRC)

UK Government department responsible for collection of taxes, payment of some State benefits and prevention of organised financial crime.

Ill-health retirement

Ill-health retirement is where a member is permitted to draw their pension before the age of 55 (or the Fund's ordinary retirement date) due to sickness, disability or other medical condition. For more details see the when to retire page. 

Independent Financial Adviser (IFA)

Independent Financial Advisers (IFAs) are professionals who offer independent advice on financial matters. You can find IFAs in your local area at unbiased.co.uk.

Industry-wide pension scheme

A scheme set up for members of a particular industry.

Inflation

The rate of increase in prices over a given period of time.