pensionable

Pensionable is an adjective used in occupational pension contexts to describe portions of earnings or periods of service that a pension scheme recognizes for calculating benefits or contributions. What counts as pensionable is determined by the rules of a given plan and can differ between countries and schemes.

Pensionable earnings are the portion of an employee’s pay that builds future pension rights. This typically includes base salary and some regular allowances, but discretionary bonuses, overtime, or certain non-cash benefits may not be pensionable. Changes in pay or job role can alter how much of earnings are pensionable, depending on the scheme’s provisions.

Pensionable service refers to the length of service that counts toward pension accrual. Service is generally credited for periods of active membership, but how breaks, unpaid leave, or part-time work affect pensionable service varies by plan. Some schemes adjust accrual or require restoration of service after certain interruptions.

Because definitions vary by scheme, employees should review plan documents or consult human resources to understand what earnings and service are pensionable. The term is used across defined benefit and defined contribution plans and can influence both contribution levels and the size of future benefits.