As a member of the RPS the earliest you can draw your RPs pension benefits is age 55. However, if you have a Protected Pension Age you could draw your RPS pension benefits at age 50.
The Normal Pension Age differs between RPS60 and RPS65. For RPS60 the Normal Pension Age is 60. For RPS65 the Normal Pension Age is 65.
So if you draw your RPS60 or RPS65 pension benefits before the relevant Normal Pension Age, they will be reduced for early payment.
You don’t have to draw your RPS benefits early, or at the Normal Pension Age, but you must claim your benefits before the age of 75.
At Network Rail there are three types of retirement:
- retire and leave Network Rail
- retire and remain in employment with Network Rail
- ill-health
Retire and leave Network Rail
If you leave Network Rail and you are over age 55 (or age 50 if your have a Protected Pension Age), you can decide to draw your RPS pension benefits.
When drawing your RPS pension benefits you will have the following options:
- take your RPS benefits as an annual pension which is payable for life (RPS60 members will also get an automatic tax-free cash lump sum);
- exchange some of your RPS pension for a tax-free cash lump sum. For RPS60 members, this means you can increase your automatic tax-free cash lump sum. For both RPS60 and RPS65, every £1 of pension exchanged, will give you £12 of lump sum.
Under current tax rules the maximum you can take as a tax-free cash lump sum is 25% of the capital value of your RPS pension benefits (the maximum lump sum you are allowed will be tested against the Lifetime Allowance).
Your RPS pension will be reduced as a result of taking a tax-free cash lump sum.
Additionally, if you have BRASS funds, you could use some or all of your BRASS funds to provide your lump sum benefit, or top up your lump sum for RPS60 members; - in RPS60, you can also give up some of your automatic tax-fee cash lump sum or any BRASS funds for a higher annual pension. To increase your RPS60 pension by £1, you will need to give up £12 of your lump sum (different factors apply for exchanging BRASS funds into pension).
- draw your RPS pension on a ‘Level Pension’ basis. This option helps even out the change in your income when you start claiming your Basic State Pension. This is done by drawing a higher RPS pension before you claim you Basic State Pension, then when your Basic State Pension commences, your RPS pension then reduces. The ‘Level Pension’ option won’t be available if you are within one year of your State Pension Age (SPA), over SPA, you are in receipt of an RPS ill-health pension or your pension before or after SPA is below the minimum level.
- if you have BRASS funds and you have stopped contributing into BRASS, you have the additional option of transferring these funds to a separate pension provider or Flexible Drawdown arrangement, whilst keeping your main RPS pension benefits where they are.
Retire and remain in employment with Network Rail
If you are aged 55 or over (irrespective of if you have a Protected Pension Age of 50) but don’t wish to down tools and fully retire, Network Rail offer you the option of drawing your RPS pension benefits and carry on working with the Company, in your existing role and retaining your current working hours.
This is subject to Company approval, with some supporting information sought from your Line Manager.
If Company approval is granted, you will have the same options as listed in the section above when drawing your RPS pension benefits.
Please note, if you are under the Normal Pension Age, for some RPS members your RPS pension benefits would be worth less than if you left Network Rail and claimed your RPS pension benefits due to the early retirement factors applied.
Initiating your retirement
Before you make any decisions, it’s always advisable that you obtain a RPS pension estimate of what you’re likely to receive if you do retire.
You’ll also need to check to see if your RPS pension benefits impact your Annual Allowance and Lifetime Allowance.
You can obtain a RPS pension estimate on your RPS Member Account or by contacting the Network Rail Pensions Team.
Following receipt of your RPS pension estimate, if you do decide to retire you will need to contact the Network Rail Pensions Team in order to initiate your retirement.
To allow enough time to get your RPS pension benefits in place ready for payment, please contact the Network Rail Pensions Team three to six months prior to your intended retirement date.
Please include the following information in your email:
- Network Rail Employee Number;
- Date of retirement / date you wish to draw your RPS benefits;
- whether you are leaving Network Rail or remaining in employment with Network Rail.
If you are intending to retire and remain in employment with Network Rail, Company approval will be sought at this point.
Following confirmation of your retirement date or Company approval being granted, a Retirement Pack, including details of the options available to you and the forms for you to complete, will be sent to your home address.
Payment of your RPS pension benefits
Payment of your RPS pension benefits depends on which option you have elected.
If you are due, or have elected to take a tax-free cash lump sum, you will receive your lump sum payment shortly after your retirement date.
Your regular monthly RPS pension payments will be paid to your nominated bank account on the first available RPS pay day following your retirement, and then every four weeks.
The pension scheme administrator will write to you confirming the dates your RPS pension will be paid.
Once in payment, your RPS pension will be increased on the 1st April each year by the applicable Revaluation Percentage.
For tax purposes, your RPS annual pension is classed as income and therefore subject to tax but not National Insurance Contributions.
Ill-Health
If you have to stop working because of illness or injury and you leave Network Rail on the grounds of ill-health severance, you may be able to draw your RPS pension benefits before the earliest pension age of 55.
In order to qualify for payment of an Ill-Health pension under the Rules of the RPS pension scheme, an application must be made to the RPS Pensions Committee with supporting medical evidence and information about your current role at Network Rail.
If the RPS Pensions Committee agrees that your medical condition meets the definition of ‘incapacity’ as outlined in the RPS Scheme Rules, your RPS pension will be enhanced by the lower of:
- the number of years to your 40 years maximum RPS membership date;
- the number of years to age 60 (for RPS60 members) or age 65 (for RPS65 members);
- or 10 years RPS service.
Please note, entitlement to Ill-Health Severance at Network Rail does not automatically mean an entitlement to an RPS Ill-Health pension as the conditions for eligibility are different. The RPS Ill-Health pension application is an entirely separate process to that of the Network Rail Ill-Health Severance process, and you will need to undergo a second medical assessment.
Late Retirement
You can decide to continue working for Network Rail after the RPS60 or RPS65 Normal Pension Age, or similarly if you are a Deferred member, you can choose to postpone drawing you RPS until after the Normal Pension Age.
In both cases, your RPS pension benefits will be paid at an enhanced rate when you do decide to draw them. Late Retirement factors will be used to calculate how much extra will be added to your RPS pension benefits.
For both RPS60 and RPS65, you must draw your RPS pension benefits by your 75th birthday.