The Network Rail Defined Contribution (NRDC) pension scheme is available to all new and existing Network Rail employees under the age of 75.
How to join?
If you are a new employee at Network Rail you will be contractually enrolled into the NRDC by default on your first day of employment, unless you have completed a Membership Form to join either the CARE Pension Scheme or Railways Pension Scheme (RPS).
Current employees can join the NRDC at any time by completing the NRDC Membership Form. Membership will commence from the first day of the next available pay period.
The NRDC Membership Form can be requested from the Network Rail Pensions Team.
How much does it cost?
If you do not complete a Membership Form, you will be entered into the NRDC by default with an Employee Contribution rate of 0% and Employer Contribution rate of 3%.
On the other hand, as an NRDC member you have a choice of contribution rates as follows:
*subject to minimum Automatic Enrolment contributions
NRDC contributions are capped by the Notional Earnings Cap. 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 NRDC contributions on the amount which is in excess of the Notional Earnings Cap.
NRDC and Automatic Enrolment
As part of the UK Governments Automatic Enrolment legislation, Network Rail have to regularly assess whether the NRDC contributions both you and Network Rail make meet the legislative minimum contributions.
Currently the legislative minimum contributions for employees are 5% of Qualifying Earnings (earnings between a lower and upper limit set by Government) and for Network Rail it is 3% of Qualifying Earnings.
If you meet the specific automatic enrolment criteria and your NRDC contributions do not meet the legislative minimum contributions, then an additional contribution called the ‘Underpin’ will be deducted from your pay to meet these legislative minimum contributions.
If you are subject to automatic enrolment and ‘Underpin’ contributions being deducted, you will receive written notification and details of your options.
You can elect to opt out of these ‘Underpin’ contributions and remain a member of the NRDC pension scheme by reverting back to your normal NRDC contribution rate.
Please note that every three years Network Rail have to assess anyone who has chosen not to pay the legislative minimum contributions and again apply ‘Underpin’ contributions to their pay to ensure they meet the legislative minimum contribution level.
Please see the Auto-Enrolment section for further detailed information.
Tax Relief
One of the biggest benefits of paying into the NRDC pension scheme is that your contributions are eligible for tax relief.
NRDC 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 NRDC contributions and reducing the amount of tax you pay.
SMART Contributions
SMART is a salary sacrifice arrangement and is how Network Rail deducts NRDC contributions from your pay, allowing you to pay less in National Insurance Contributions.
Paying NRDC contributions via SMART does not affect your pension benefits. It means that:
- Network Rail pay your NRDC contributions on your behalf;
- your contractual pay is adjusted to reflect this change; and
- 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.