RPS 5 Year Invitation

• Defined contribution pension scheme
• The amount that you and Network Rail contribute directly relates to the pension that you’ll receive at retirement
• The contribution structure is flexible, and you can choose what you contribute each period (subject to Automatic Enrolment minimums).
• The contributions are paid into your ‘Personal Retirement Account’ (PRA) and invested to try and achieve a return and increase the value of your PRA.
• You can control your investments or take a more passive approach.
• Pensionable Pay (used to calculate your contributions) is based upon your Headline Salary plus regional allowances.
• At retirement, you have different options available but won’t receive a monthly pension directly from the pension scheme.

• Defined benefit pension scheme
• For each year you’re a member, you accrue 1/60^th of your Pensionable Pay as a pension unit.
• Revaluation is applied too, in line with CPI, meaning that the pension units will increase in value whilst you’re an active member.
• The contribution rate is fixed at 7.24% for employee’s, and 10.86% for Network Rail.
• You have the option to pay Additional Voluntary Contributions (AVC’s).
• Pensionable Pay (used to calculate your contributions and the amount of pension that you accrue) is based upon your Headline Salary plus regional allowances.
• At retirement, you’ll receive a pension paid every four weeks.
• No automatic lump sum, but you would have the option to convert annual pension to tax-free lump sum, or have the option to use any AVCs to fund a tax-free lump sum (subject to limits).
• Normal retirement age 65.

• Defined benefit pension scheme
• Pension is calculated based upon your final average Pensionable Pay at retirement, number of years Scheme service and the Scheme accrual rate.
• The contribution rate is fixed at 6.08% for employees and 7.92% for Network Rail.
• Pensionable Pay is subject to a Pensionable Pay Cap, set in line with the Retail Price Index (RPI), and it’s common for members of the RPS to have a lower Pensionable Pay in comparison to their headline salary.
• A Basic State Pension deductor is applied, equal to 75% of the Basic State Pension, to both your Pensionable Pay used to calculate pension contributions and Pensionable Pay used to calculate your pension at retirement.
• You have the option to pay Additional Voluntary Contributions, known as BRASS within RPS.
• At retirement, you’ll receive a pension paid every four weeks.
• No automatic lump sum, but you would have the option to convert annual pension to tax-free lump sum or have the option to use any BRASS to fund a tax-free lump sum (subject to limits).
• Normal retirement age of 65.

How is my pension calculated?

For NRDC, it’s the value of your Personal Retirement Account (RPA) which forms your pension. Both yourself and Network Rail will contribute throughout your membership for the scheme, and any investment returns will be added to your PRA.

CARE works differently, and as a member of CARE, your pension is calculated as 1/60th of your Pensionable Pay each scheme year that you are a contributing member. The amount you accrue in a year is then revalued in line with the Consumer Price Index (CPI) each year on 1st April, until you retire.  The increase only applies to full scheme years, so if you were to retire part way through the year, the pension that you have accrued from 1st April to your date of leaving would not be increased.

If you earnt £30,000 and were a member of the scheme for 5 years, assuming CPI each year is 2% your pension would be calculated as follows:

RPS65, another type of defined benefit pension scheme, works differently again, and your pension is calculated upon your final average 12 months Pensionable Pay, less the 75% of the Basic State Pension, multiplied by your years’ of service and divided by the scheme accrual rate of 60.

Using the same example above, with 5 years scheme membership and final pensionable pay of £30,000 your pension would be calculated as follows:

£30,000   –	£7,234.21    =	£22,765.79    x	5           /	60             =	£1,897.15
Pensionable Pay	Less BSP Deduction	Final Pensionable Pay	Years’ Service	Scheme Accrual Rate	Annual Pension Payable

Tax relief

All normal pension contributions are deducted via SMART. SMART is where your contributions are deducted before tax and National Insurance are calculated. This means that your salary used to calculate how much tax and National Insurance you pay is less, resulting in you having to pay less tax and national insurance.

However, don’t worry, for mortgage or purposes where you are required to declare your annual salary, SMART is excluded, and your gross annual salary still applies.

Please note SMART is not applied to AVC/BRASS contributions.

What happens if I decide to leave Network Rail before I retire?

Your pension, regardless of whether it is NRDC, CARE or RPS65 will become preserved. In this situation, you will have three options:

• Leave your pension where it is and claim it when you do retire.
• Transfer it to another approved pension scheme.
• If you are over the age of 55, claim it straight away although it will be reduced for early payment.

It is really important to make sure that you keep your personal details up to date with the pension scheme administrator. If you do not, and you lose track of your pension, the pension scheme administrator may struggle to contact you when your pension becomes payable. 

When can I retire?

As per government legislation, the earliest that you can claim your pension from all three schemes is currently age 55. This is set to increase in April 2028 to the age of 57, and for any new joiners to NRDC, CARE or RPS65, will have a minimum retirement age of 57.

The Normal Retirement Age for CARE and RPS schemes is 65, and if you claim your pension before this date, then your pension may be reduced for early retirement.

NRDC works differently, and can be claimed from the minimum retirement age without any penalties or reductions.

What if I’m too ill to continue working?

In the event that you are unable to continue working due to ill health, the pension schemes do have different options depending on your circumstances. It would be necessary to undergo a medical assessment with the Trustees Occupational Health Provider, and the Trustees of the respective pension schemes have the ultimate decision as to whether or not you would qualify for payment of your pension on ill health grounds.

If an ill health pension is awarded, the benefits are as follows:

NRDC – NRDC pensions can be paid early if you are not well enough to continue working. There is no enhancement to your pension, but if the Trustees approve it, you can claim your pension pot straight away. For cases of serious ill health, where you have a terminal diagnosis with a life expectancy of less than 12 months, you could take your whole NRDC pension as a tax-free lump sum.

CARE – There are 2 levels of ill-health benefit.  You may be entitled to an immediate pension providing your ill-health is not in relation to a pre-existing medical condition prior to joining the Scheme and subject to Company and Trustee consent. The 2 levels are:

If you are unfit for your current role, you could receive a pension based on pensionable service to date with no early retirement reduction.

If you are unfit for any gainful employment, you could receive a pension based on your CARE service to date plus added years (limited to 2 times your CARE service at your date of leaving) with no early retirement reduction.

RPS65 – You may be entitled to ill-health benefits provided you have 5 years Company service or membership in the NR Section and meet the ill-health requirements in the Rules of the Scheme.

Your pension would be payable immediately, with up to ten years added service at the Trustees discretion, and you would retain the option to sacrifice some of your annual pension for a lump sum.

Am I still entitled to the State Pension?

Absolutely! Being a member of any of the Network Rail Pension Schemes has no effect on your State Pension.

What happens to my NRDC/CARE pension if I do decide to join RPS65?

Your pension will not automatically transfer with you to RPS65. If you do not elect to transfer it, you will have a preserved pension remaining in the respective scheme, which you could claim as a separate pension at retirement.

If you are currently pay contribution arrears, due to a period of unpaid leave, you will not be able to continue paying these arrears should you decide to join RPS65. If you are currently a CARE member, you would have a break in service and for NRDC members, your PRA will be less than what it would have been had you continued to pay the arrears.

If you do want to transfer your pension to RPS65, you would need to wait until you have received your welcome pack from RPS65 before requesting a Transfer In form from Railpen.

How soon will I be enrolled if I do decide to join RPS65?

Willis Towers Watson will write to you approximately 3 months prior to your 5-year anniversary date. Once your anniversary date has passed, you will be enrolled in to RPS65 from the beginning of the next available pay period.

You may not see a difference to the name of your pension contributions, as they will be deducted via SMART and will still show on your payslip as ‘SMART Deduction’, however the amount you contribute is likely to change. Please ensure you check your payslip on the first available pay period after your 5 year anniversary if you have elected to join RPS65 to ensure your contributions have changed.