As an employee of Network Rail you can join the CARE pension scheme, providing you are under the age of 75 and employed for a regular fixed number of hours per pay period e.g. per weekly or four-weekly.
How to join?
To join the CARE pension scheme you will need to complete the CARE Membership Form.
New employees can join from their initial date of employment by completing the CARE Membership Form which will have been issued alongside your Network Rail Contract of Employment.
Current employees can join at any time by completing the CARE Membership Form and membership will commence from the first day of the next available pay period.
The CARE Membership Form can be requested from the Network Rail Pensions Team.
How much does it cost?
As a CARE member you will pay 7.24% of your pensionable salary (as of 1st April 2021).
Network Rail will also contribute 10.86% towards your CARE pension benefits.
The overall cost of the wide range of benefits provided in the scheme is shared between the member and Network Rail. The member meets 40% of the overall costs and Network Rail 60%.
CARE contributions are capped by the Notional Earnings Cap, which is the maximum amount of Pensionable Salary that can be used to calculate your CARE pension benefit accrued in each Scheme Year. The Notional Earnings Cap increase each year and is currently £223,800 (2024/2025 tax year).
This means that if your Network Rail pay is in excess of the Notional Earnings Cap, you will not pay CARE contributions on the amount which is in excess of the Notional Earnings Cap.
The CARE contribution rates are reviewed by the Trustee and the Scheme Actuary every three years and you will be advised in advance of any changes.
Tax Relief
One of the biggest benefits of paying into the CARE pension scheme is that your contributions are eligible for tax relief.
CARE contributions are automatically deducted from your pay before tax. This means you only pay tax on your take-home pay, which doesn’t include your pension contributions. So you are getting tax relief on your CARE contributions and reducing the amount of tax you pay.
SMART Contributions
SMART is a salary sacrifice arrangement and is how Network Rail deducts CARE contributions from your pay, allowing you to pay less in National Insurance Contributions.
Paying CARE contributions via SMART does not affect your pension benefits. It means that:
- Network Rail pay your CARE contributions on your behalf;
- your contractual pay is adjusted to reflect this change;
- your take-home pay goes up because you are paying less National Insurance Contributions.
SMART does not impact your salary for the purposes of mortgage applications, State benefits or death in service life cover.