Term

Definition (and examples - if applicable)

How this is applied

BASIC SALARY

Otherwise simply known as your ‘salary’, which is set out within your contract of employment. It is always referred to on payslips as “Basic Salary” and is the specific spine point (or fixed salary) that sits within the grade which your job role is paid against.

You can visit the Salaries webpages which lists Imperial's salary scales for each job family.

REFERENCE SALARY

 

This term is used to describe the rate of Basic Salary and/or of any other additional pay before the pension reduction.

Pension contribution rates are currently:

  • For USS – a total contribution of 20.6% (made up of a 6.1% employee contribution plus a 14.5% employer contribution).
  • For SAUL CARE - a total contribution of 27% (made up of a 6% employee contribution plus a 21% employer contribution).
  • For SAUL Start - a total contribution of 21% (made up of a 6% employee contribution plus a 15% employer contribution).

PENSIONSMART SALARY

This term is used to describe the rate of Basic Salary and/or of any other additional pensionable pay after the pension reduction described.

See above for the current pension contribution rates for USS and SAUL.

PENSIONABLE SALARY

The term “Pensionable Salary” refers only to pay which counts for pension purposes.

It comprises the sum of your basic salary plus any other pensionable allowances that you are entitled to before the pension reductions (described above) are applied. It does not include non-pensionable pay elements.

OTHER PENSIONABLE ALLOWANCES

In addition to Basic Salary, some employees receive extra fixed allowances which count towards their pension. Examples include London Weighting Allowance (for those employees still remaining on the national pay scales), various honoraria and allowances for special duties, shift allowances and “on-call” supplements.

Under PensionSMART, your salary will be reduced in line with the pension reductions described above (the employee contribution rate). In return, an equivalent amount will be paid by Imperial (the employer contribution rate).

NON-PENSIONABLE ALLOWANCES

A few employees also receive non-pensionable allowances. Examples include monthly supplements for work/duties which are completely unrelated to their duties for Imperial but are paid through Imperial's payroll system (e.g. for acting as branch secretary to a learned society, or for work in support of private clinical practice or external consultancy work). 

All bonuses also fall into this category, as do taxable re-imbursement of expenses, for example relocation expenses over £8,000.

 

Non-pensionable allowances are not affected in any way by participation in PensionSMART and will appear on payslips separately.

ADJUSTED SALARY

Your Adjusted Salary is your PensionSMART Salary. This simply means the salary amount which remains after the total of your Basic Salary (and other pensionable allowances) are reduced by the relevant pension reductions mentioned above (plus any non-pensionable allowances you may receive). The latter are unaffected by participation in PensionSMART.

 

PAYE and NIC is then calculated on your Adjusted Salary. These statutory deductions, together with some other statutory and voluntary deductions (e.g. season ticket loan repayments) are deducted from your Adjusted Salary to produce your final ‘net' take home pay.

DEFERRED BENEFITS

This is when you leave the pension scheme before your retirement date (either through employment resignation or opting out of the scheme) and the pension you have already earned remain within the pension scheme.

Your basic pension and lump sum are calculated at your leaving date and are then increased annually by the scheme to take into account the effect of inflation. PensionSMART has no bearing on this.