"Rest in Peace" comes from a tradition which includes the idea of bodily resurrection of the dead in a Messianic era. One of the theological frameworks around this idea is that good people lay quiet in their graves in a restful sleep-like state until it is time to be resurrected into a perfected world, while less-good people who are nonetheless still worth bothering with are tortured until they "pay their debt to society", after which they get to be resurrected, too, while TRULY evil people are either tortured without end, or, in some versions, simply cease to be.

So "Rest in Peace" is an affirmation that you believe that the person under discussion deserves not only to participate in an afterlife, but that he or she deserves to do so without paying any additional suffering.

Actually, I'm keen to pay tribute to EVERYONE by remembering their life rather than speculating on life after death. I was taught that we can know nothing about life after death, but we're pretty sure that life BEFORE death exists, so focus on THAT.

When my students in Hebrew school asked me about what happens after you die, I'd tell them about the process of preparing the body, burying it, and memorial. Because THAT we can know.