a guide for members · ‘indefeasible right’, under the railways act 1993, you will continue as...

A guide for members RPS 65

Disclaimer

The information provided in this guide is intended for general information and illustrative purposes. Your benefits will be worked out in accordance with and subject to the governing trust deed and rulesand relevant legislation.

Although every effort has been made to ensure the information given in this guide is accurate, none of theinformation given can give you, or your beneficiaries, legal rights to benefits that differ from those provided inthe pension trust and rules. The Trustee, Network Rail and RPMI give no warranty and accept no responsibility forthe accuracy of the information provided, or for your reliance on that information. Therefore, the informationprovided should not be relied upon to make investment or other decisions.

Welcome 02Contents

0102030405060708091011121314

Glossary 4

Welcome to RPS 65 6

Benefits of membership 7

Benefit types 8

Cost 10

Saving more 12

If things change 14

Benefits for dependants 16

Take control 18

Your tax limits 19

Thinking about retiring? 20

Options at retirement 22

Combined membership 24

Important notes 25

page

A guide for members

More online - www.myNRpension.co.uk Read as you need availableRAYN

Glossary

Glossary

The CommitteeA Pensions Committee which Network Rail has set up with equal numbers ofmembers’ and employer’s appointees dedicated to the Network Rail Section. TheCommittee works with the Trustee to manage the Network Rail Section for you and your dependants.

Final average basic State PensionThe single person’s basic State Pension averaged over the 12 months before you:take your benefits; leave the Section of your Scheme; or die; whichever is earlier.

Final average pensionable payYour pensionable pay averaged over the 12 months before you: take your benefits;leave the Section of the Scheme; or die; whichever is earlier.

Pensionable payYour yearly rate of pensionable pay on each 1 April.

RulesA document which sets out in detail how the Network Rail Section of the Schemeworks and what benefits are provided.

The SectionThe Network Rail Section of the Railways Pension Scheme.

TrusteeThe Railways Pension Trustee Company Limited.

01A guide for members

07/12 RPS 65 04 | 05

01 Glossary

Minimum Pension AgeThe earliest age at which you can apply to take your pension benefits. Generally, ifyou were a member of the NR Section or any other section of the Railways PensionScheme on 5 April 2006, you may be able to claim your pension benefits from age50 if you apply for immediate payment on leaving employment. If you weren’t amember on this date, your Minimum Pension Age will be 55. You can check this with RPMI.

Pensionable Restructuring PremiumThis is part of your pay which is treated as pensionable from a certain date.Pensionable Restructuring Premiums (PRPs) are used to calculate contributions andbenefits payable from the Section.

A PRP only affects benefits accrued from the date it starts.

Section payPensionable pay (including all pensionable restructuring premiums), less 75% of thesingle person’s basic State Pension.

Your Section pay will never be less than half of your pensionable pay (including allpensionable restructuring premiums).

If you joined the Section before 1 July 2012, please refer to the section in thisbooklet called ‘Combined membership’ to see how Section pay differs for yourservice before July 2012.


Welcome

Welcome to RPS 65

You’re a member of a highly valuedpension scheme.

So how do you feel about retirement? Is it still a long way off… or approaching fast?

And what does it mean to you? Chances are,you haven’t given it much thought becauselife’s busy enough as it is.

That’s why it’s important for you to readthrough this RPS 65 guide when you’ve got time.

From July 2012, Network Rail introducedimportant changes to its Section of theRailways Pension Scheme (RPS) to ensure it remains affordable and sustainable.

This guide includes lots of useful informationabout getting the most out of your pension,the benefits of belonging to RPS 65, andanswers to your important questions.

Wherever you see this symbol , it meansmore detail is available in Read As You Needleaflets on www.myNRpension.co.uk

You can also register on this website to viewyour RPS 65 pension details, and play anactive role in planning your retirement.

Important note: If you were a member ofthe Network Rail Section before 1 July 2012,please see the section ‘Combinedmembership’ in this booklet for details about your combined membership in RPS 60 and RPS 65.

If you have a general query about yourpension, please call the Helpline on 0800 2 343434.

Now is the perfect time to startgetting the most out of tomorrowby planning for it today.

RAYN

02A guide for members

Benefits of membership A guide for members

03

07/12 RPS 65 06 | 07

Benefits ofmembership Here’s the good news!You’re never too young or too old to start planning your retirement.

Retirement is no longer seen as ‘the end ofthe road’ and many people don’t want tochange their lifestyles because of it.

BenefitsBy becoming an RPS 65 member of theNetwork Rail Section, you have taken animportant step towards building your financialfuture. So what are the benefits of belongingto the Section?

Most importantly, you will get a pension forlife when you retire (exceptions such as‘opting out’ are explained later in this guide).

The amount you get depends on:

� how long you have been a member of the Section; and

� your final average pensionable pay, plusother benefits such as BRASS funds.

Under current Rules, pensions are paid everyfour weeks into your bank account.

You can decide how to make your benefitswork best for you.

For example, you can choose to convert someof your RPS 65 pension into a lump sum(currently tax-free) when you retire.

You can also ‘top up’ your benefits throughBRASS, which is the Additional VoluntaryContribution (AVC) savings facility for the RPS.

Protected RightsIf you were a member of the British RailPension Scheme on or before 4 November1993, you may have certain legal rights tojoin the Section. Contact the Network RailPensions Team if you are unsure about yourright to join.

‘Your Protected Rights’RAYN

Benefit types

04


Benefit typesYou may be eligible for differenttypes of Scheme benefits,depending on when you retire orchanges in your circumstances.

These terms can be confusing, so here is aguide to the benefit types and when you canstart claiming them:

Normal retirement benefitsThese can be taken at your 65th birthday(Normal Pension Age) or at any time betweenthe ages of 65 and 75.

Early retirement benefitsYou may qualify for early retirement from age55, or 50 if you have a protected MinimumPension Age, but your benefits will bereduced compared to what you would get atyour Normal Pension Age.

Ill-health benefitsIf you retire through ill-health, you can applyfor your benefits if:

� you have been in your Section for at leastfive years, or have at least five years’membership in the Section (includingtransferred membership);

� a medical expert chosen by theCommittee provides evidence that youcan’t work in your current job or anyother suitable job (other thantemporarily);

� you are under age 65; and

� you apply within a year of leaving workwith Network Rail.

If you are under 65 and start working againwhile claiming ill-health benefits, yourpension may be reduced or suspended,depending on:

� your earnings; or

� if the Committee receives medical advicethat you are able to earn an income.

When you reach 65 you can claim the fullpension again, even if you carry on working.

‘A guide for members applying forincapacity benefits’

RAYN

A guide for members

07/12 RPS 65 08 | 09

Preserved benefitsIf you leave the Scheme before you are ableto receive your benefits, you become a‘preserved’ member. This means you don’tpay any more contributions and you don’tbuild up any more benefits in the Section.

However, your preserved benefits increaseeach April in line with Orders made underthe Pensions (Increase) Act 1971 and inaccordance with Scheme Rules, from thedate that your membership ends.

These benefits can be paid from age 65without any reduction; or they can be left inRPS 65 up to age 75 if you wish. If you decideto take your benefits after age 65, yourbenefits will be increased to reflect the laterpayment date.

You will also be covered for dependants’benefits, although any lump-sum death benefitis likely to be a lot less than when you were acontributing member.

You can apply to transfer your preservedbenefits to another registered pension scheme.

Transferring benefitsTransferring-outPreserved members may be able to transfertheir benefits to another Section within theRPS, or to a different pension scheme outsidethe RPS. A transfer-out would include thevalue of your BRASS account (if applicable)up to the date of transfer.

Transferring benefits in from another RPS SectionYou can transfer-in benefits from another Section.

‘A guide for members transferring fromone section to another’

Transferring benefits in from outside the RPSRPS 65 does not accept transfers-in fromexternal pension schemes with the exceptionthat the NR Section will accept transfers-infrom the Network Rail Defined ContributionPension Scheme (NRDC) and the Network Rail

CARE Pension Scheme (CARE). Transfers-in fromthe NRDC and CARE Schemes would be investedin BRASS only. At retirement you can use thesefunds to provide a cash lump sum (up to HMRClimits), or convert to additional pension.

Compulsory transfer of employment (TUPE)If your job is transferred to another employer,because of a contract or business sale orchange in franchise, you can no longer be amember of RPS 65.

If you are a ‘protected person’ or have an‘indefeasible right’, under the Railways Act1993, you will continue as a member of the Scheme. Your new rail employer mustgive you the option of joining their Section of the Scheme.

RPMI will contact you once your newmembership is set up, and will send youtransfer information about your pensionoptions within six months of youremployment transfer.

‘Your Protected Rights’

If you work part-time…You are entitled to the same benefits as yourfull-time colleagues, based proportionately on your part-time hours (compared to the full-time hours) for your job. For example:

ill-health benefits: The number of years’membership you need to qualify for these isnot affected by the number of hours you work.

dependants’ benefits: The amount ofbenefits is calculated based on your part-time hours.

contributions: These are calculated usingthe equivalent full-time rate of Section payfor your job, but reduced in proportion tothe hours you work.

AVCs: You are entitled to the same terms asyour full-time colleagues.

‘A guide for members on working part-time’

RAYN

RAYN

04 Benefit types

RAYN

Cost

05CostNormal member contributionsto RPS 65 are usually paidthrough the SMARTarrangement, so as well as taxrelief members pay less NI too.

Think SMART!Participating in the SMART arrangement doesnot affect your pension benefits. It means that:

� Network Rail pays your normalcontributions on your behalf;

� your contractual pay is adjusted to reflectthis change; and

� your take-home pay goes up, becauseyou are paying less National InsuranceContributions.

Normal contributions for the RPS 65 terms willbe paid through the SMART arrangement,except in limited circumstances. There is novoluntary SMART opt-out for RPS 65members. Please refer to the SMART bookletfor information on how SMART operates.

What Network Rail paysThe RPS is a shared cost scheme: Network Railpays 60% of the cost, which is normally 1.5times the normal member contribution. Thinkof it as another regular top-up for yourbenefits at no cost to you.

Tax relief is limited by the Annual Allowance,which is currently a maximum of £50,000 for2012/13. Visit www.direct.gov.uk or godirectly to the HMRC site www.hmrc.gov.ukfor detailed information and updates.


Network Rail

60%

40%

You

A guide for members

07/12 RPS 65 10 | 11

05 Cost

How contributions are calculatedThe rate of normal contributions can go up ordown, in order to meet the cost of payingcurrent and future benefits from the Section.Generally, the contribution rate is reviewedevery three years by an external adviser to theTrustee known as the Scheme Actuary. Thecurrent RPS 65 contribution rate (July 2012) is7.00% of the Section pay for members, and10.50% for Network Rail.

Member and employer contributions toRPS 65 are normally fixed in July each year.Contributions are deducted as a percentageof your Section pay, which is calculated bydeducting 75% of the basic State Pensionfrom your pensionable pay (see Options atretirement section); and is based on yourpensionable pay from the previous 1 April,or the date you joined the Scheme if laterin the year.

This amount is fixed for the next 12 months,unless:

� there is a change in the agreedcontribution percentage;

� a change in your circumstances, such astaking statutory maternity, paternity oradoption leave; or

� you change your working hours e.g.going part-time.

Your National Insurance contributions arealso lower because the Scheme is contractedout of the State Second Pension, andprovides benefits that are at least as good asthose set out by the government.

Increases to pensionable payFrom 1 July 2012, any annual increase toyour pensionable pay, e.g. from your yearlypay review, is capped at a maximum of theannual Retail Prices Index (RPI) for the previous September plus 0.5%. From 1 April 2013, this cap applies every year from 1 April to 31 March.

In addition, any increase to your basic payas a result of a promotion which involves achange in Grade or Band will be treated aspensionable for future service only from thedate of promotion; this is known as aPensionable Restructuring Premium (PRP).

Protecting your benefitsThe Scheme provides two valuable types ofprotection against inflation:

� While you are an active RPS 65 member,as your pensionable pay grows, so doyour benefits;

� When you take your benefits, or becomea preserved member, your pensionincreases in line with Orders made underthe Pensions (Increase) Act 1971 andScheme Rules. Traditionally this increasehas happened in April. The ConsumerPrice Index (CPI) is the measure ofinflation currently used for theseincreases.

Your contributions end when you:� Stop working for Network Rail;

� Opt-out of RPS 65;

� Start claiming your benefits;

� Reach age 75, or have 40 years’membership (whichever is earlier).

Saving more

06

BRASS allows you to decide:

� how much you want to contribute*;

� how you invest your contributions;

� when you start - and stop - makingcontributions.

You have to take your AVC benefits at thesame time as your main Scheme benefits.

Generally you can contribute up to 75% ofyour taxable earnings to RPS 65 as AVCsthrough payroll (less normal contributions orSMART reduction). You can also pay extracontributions directly to the Scheme by

cheque, but you are responsible for reclaimingtax relief (if any) on these payments from HMRevenue and Customs (HMRC).

*If you are a ‘protected person’ you can onlypay 15% of your annual taxable earnings,including normal Scheme contributions (orSMART reduction). If you want to contributeabove 15% you can waive part of yourprotected right, specifically in respect offuture BRASS contributions.

Saving more

BRASS AVCsYou can ‘top up’ your benefitsby paying Additional VoluntaryContributions (AVCs) into yourown BRASS account.

AVCs are taken from yourearnings before income tax isdeducted, meaning extrasavings for you.


A guide for members

07/12 RPS 65 12 | 13

06 Saving more

RAYN

AVCs may be particularly suitable if you:

� have earnings which do not qualify forScheme pension, such as bonuses andovertime;

� are thinking about taking your benefitsearly (as long as you meet certainrequirements); or

� simply want to save a bit more towardsretirement.

For more information about BRASS and howto join ’A guide for members of BRASS (NR)’ isavailable on www.myNRpension.co.uk


If things change

07

RAYN

Take leaveIf you receive statutory maternity, paternity, oradoption pay, your contributions are based onthe actual pay you receive but your benefits arebased on your normal rate of pensionable pay.

If for any reason, you can’t pay thecontributions, for example you have a period ofunpaid leave, Network Rail and the Schememay collect what is owed from your futureearnings; this is known as contribution arrears.

‘A guide for members on maternity,paternity, parental or adoption leave’

Take a career breakIf you apply, and Network Rail agrees, you cantake a career break which is unpaid leave.Whilst on a career break you do not paypension contributions and the period you areon a career break will be treated as a ‘break in service’ by the Scheme.

Opt-outYou can opt-out of the Scheme while stillworking by asking for an opt-out form fromthe Network Rail Pensions Team.

If you apply to stop your membership within a month of joining, you will be treated asthough you had never joined. Network Railwill refund any contributions paid, minusadjustments for tax and National InsuranceContributions. If you apply to opt-out after amonth, your Scheme benefits will bepreserved.

You can’t rejoin the Section unless NetworkRail and the Pensions Committee agree, andyou may have to have a medical examination.Currently Network Rail does not permitemployees to rejoin if they have opted-out ofthe Section.

Circumstances can changeand you may need to knowwhat happens if you….

If thingschange

A guide for members

07/12 RPS 65 14 | 15

07 If things change

RAYN

Work and claim your benefitsYou must have Network Rail’s permission,and be at least age 55, to claim your benefitswhile still working for them.

If you are thinking about doing so, it’simportant to note that:

� you will no longer be an active memberof RPS 65 and cannot rejoin the Section;

� your benefits will be worth less than ifyou left work and claimed them if you areunder age 65; and

� you will not be eligible for death inservice cover or incapacity benefits,although a dependant’s pension may stillbe paid.

You will also need to check what, if any,pension arrangements may be available fromNetwork Rail in the future.

Retire and start work againYou must claim all your Scheme benefits atthe same time if you:

� have a Protected Pension Age and aretaking your benefits under age 55.

� have worked for different rail employersand been a member of their RPS Section.

There are important tax issues to think aboutif you leave work, claim your pension benefitsand then start working again: either for thesame employer or another employer in thesame corporate group, within six months ofretirement, or one month of retirement if youreturn to do a job which is materiallydifferent in nature.

Divorce or dissolution of a civilpartnershipIf you separate from your partner, yourpension is likely to be considered along withyour other assets when financial settlementsare worked out.

A court order (known as a Pensions SharingOrder) can be made to transfer part of thevalue of your RPS 65 benefits as part of thedivorce or dissolution proceedings. If this isthe case, it would mean your Schemebenefits will be reduced to provide benefitsfor your ex-spouse or ex-civil partner.

‘A guide for members on divorce or dissolution’

Benefits for dependants

08

Eligible dependants are classed as adultswho depended on you financially (up to amaximum of three people, excluding eligiblechildren) or the partner you were living withat the date of your death.

Eligible spouse is classed as your husbandor wife or your partner in a civil partnership,who you were living with at the time of yourdeath.

Legal spouse pensions may be payable evenif you are not living with your husband/wife/partner at the time of your death.

Benefits for the above could include:

� a lump sum of four times your finalaverage pensionable pay (less for

preserved members);

� a dependant’s pension worth half thepension you would have received if youhad retired at age 65; and

� the value of your BRASS account.

The pensions rise in line with Orders made under the Pension (Increase) Act 1971 and Scheme Rules, and are taxable.Please note these pensions may be reviewedafter 10 years; and that your dependant’spension may be reduced if they are more than 10 years younger than you.

Benefits fordependantsWhile it’s not a topic most of us wantto discuss, it’s reassuring to know thatyour dependants may be eligible forRPS benefits if you die.


A guide for members

07/12 RPS 65 16 | 17

Eligible childrenThe two youngest eligible children normallyreceive pensions until they are 18 years old.

If an eligible child is disabled or continues infull-time education after they are 18, thepension may still be paid, if your PensionsCommittee agrees. This could extend up toage 23 for students in full-time education.

The pensions rise in line with Orders madeunder the Pension (Increase) Act 1971 andScheme Rules, and are taxable. If there are noeligible dependant or spouse pensions to pay,each child’s pension is doubled.

Lump-sum death benefitIt is very important that you keep yourNomination form up to date so that theTrustee Company knows who you would liketo receive any lump-sum death benefit thatmay be payable.

Your Pensions Committee decides who willreceive the lump-sum death benefit.

It is very important to fill in a Nomination form. If you havealready filled one in, please consider completing a newNomination form if your personal circumstances change, or it hasbeen a while since you last completed one and sent it to RPMI.

You can do this by:

� completing a form online throughwww.myNRpension.co.uk; or

� requesting a form from:

• the Network Rail Pensions Team; or

• ringing the Helpline on 0800 2 343434.

Please note that any new nominations will replace any previousnominations that you have made.

08 Benefits for dependants

Nomination form reminder


09

Making themost of yourmembershipThink ahead – what do you reallywant out of retirement? Use thischecklist to help you get the most out of RPS 65 membership.

It’s important to fill in a Nominationform, and keep it up to date, so that theTrustee knows who you would like toreceive death benefits from the Schemeif you die.

Your Annual Pension Estimate (APE) istailor-made for you. When it arrives inthe autumn, please check your pension’scurrent value and the forecast of yourbenefits when you retire.

Consider paying Additional VoluntaryContributions (AVCs) into a BRASSaccount.

If you already pay into BRASS, considerreviewing your fund choices to makesure they’re still right for you.

The RPMI Helpline can assist with generalqueries about your membership andpension benefits. Tel: 0800 2 343434.

Visit www.myNRpension.co.uk tofind out about Section benefits, anddownload useful Read As You Needleaflets and find BRASS fundinformation.

Read all about it! Review newsletter,which is currently sent to you twice ayear, features pensions news, legislationupdates and general financial topics tohelp you make the most of yourbenefits.

Take control

RAYN

A guide for members

n

n

n

n

n

n

n

07/12 RPS 65 18 | 19

10Your tax limits A guide for members

Your tax limitsYou can only build up, and receive, a certain amount of pension benefitsbefore you have to pay more tax.

Saving for your retirementHM Revenue & Customs (HMRC) set anupper limit on how much tax relief you canobtain on pension savings. These are calledyour Annual Allowance and your LifetimeAllowance.

You are strongly recommended to getindependent financial advice if you think youwill be close to, or over, your AnnualAllowance or Lifetime Allowance.

What is my Annual Allowance?This is the amount you can build up and save tax-free in all your pension arrangements duringthe Scheme year (known as a Pension Input Period or PIP).

The Annual Allowance is currently set at£50,000 (for 2012/2013). If your savings goover this allowance, you may have to paymore tax. However, you may be able to carryforward any unused Annual Allowance fromup to three previous tax years.

‘Will my pension savings exceed the AnnualAllowance’; and the ‘Paying tax on pensionsavings over the Annual Allowance limit’

What is my Lifetime Allowance?This is the limit on the total amount you cansave in all your pension arrangements, beforeyou become liable to pay additional tax, overyour lifetime. This includes any you might haveoutside the Scheme (excluding State pensions).

Few members are affected by this limit, whichis set at £1.5 million (for 2012/2013).

Flexible optionsYou can contribute to other types of pensions,for example, ‘personal’ pensions, which aretotally separate from the RPS. You may wish toseek independent financial advice about theseoptions.

Benefits at retirement - maximumlump sumThere is a limit on the cash lump sum you canget from the Section, which applies to allmembers.

You can take a lump sum when you take yourbenefits at retirement; under currentlegislation, the lump sum is tax-free and set at25% of the value of your overall benefits.

‘A Guide for members on benefits andcontributions tax limits’

RAYN

RAYN

RAYNMore online - www.myNRpension.co.uk Read as you need availableRAYN

1

2

3

4

Ask for an estimate� Contact the Network Rail Pensions Team and ask for a pensions estimate

which will include details of your options.

� Or request an estimate from the RPMI Helpline on 0800 2 343434 – this will be based on the latest pensionable pay details that RPMI have received from Network Rail.

Apply for your pension benefitsFill in an Application For Payment of Benefits form, available from theNetwork Rail Pensions Team or the Helpline. You may find the Options atretirement section in this guide useful when considering your choices.

Please return your completed form to RPMI for processing along with youroriginal full birth certificate and any other relevant certificates.

Check the detailsAfter RPMI receives your form, a letter of confirmation is sent out, showingthe benefits that you will receive, depending on your options, and the datesyou will receive your lump sum and first pension instalment.

If you send your form more than a month before your retirement, RPMI willwrite to you, confirming that more details will be provided closer to theactual date you retire.

Receive your pensionWhen you reach your retirement date you will start receiving your pension,every four weeks, for life.

11

Thinking about retiring? Follow these four steps to startreceiving your RPS benefits:

Thinking about retiring? A guide for members

07/12 RPS 65 20 | 21

If payment is from a date in between birthdays, thereduction is adjusted appropriately.

*Please refer to the definition of Minimum PensionAge in the Glossary to check if you may be eligible toclaim early retirement pension benefits under age 55.

IMPORTANT NOTE: The factors in column B and Cmay change from time to time. You should ask foran early retirement estimate rather than rely on thistable in the future.

11 Thinking about retiring?

Age

This table shows the amount of benefit you will receive if you leave employment andtake immediate early payment.

65

64

63

62

61

60

59

58

57

56

55

*54

*53

*52

*51

*50

100%

100%

100%

100%

100%

100%

98%

96%

94%

92%

90%

87%

84%

81%

78%

75%

100%

100%

100%

100%

100%

100%

94%

88%

83%

78%

73%

69%

65%

61%

58%

55%

Column A

Category One member (allbenefits) and Category Twomember (benefits earnedup to 30 June 2009)

Column B

Category Two member(benefits earned on orafter 1 July 2009)

100%

93%

87%

81%

76%

71%

67%

63%

59%

56%

53%

50%

47%

45%

43%

40%

Column C

Members in CategoryOne and Category Twofor benefits earned after1 July 2012

Pensionable service to 30 June 2012 From July 2012

Categories of memberCategories are needed to identify howmembers are treated for early retirementbenefits.

If you were a contributing member on 1 July2009, you became either a Category One ora Category Two member under the Rules forthe Network Rail Section of the Scheme.

Category One members will be members whoare Protected Persons. Other members,including those who have the Indefeasible

Right to be a member of the Railways PensionScheme, will be Category Two members.

Generally, if you joined the Network RailSection after 1 July 2009 (but before 1 July2012) you will be a Category Two member.

However, there are certain circumstanceswhere you could be classed as a Category Onemember. If you are unsure and would like tofind out which category you are in, pleasephone the Helpline and they will be able toconfirm this for you.


Options atretirement

Take a cash lump sum You may be able to take a lump sum, tax-freeunder current legislation, by giving up part ofyour pension (up to a limit, see the Tax Limitssection for details). For every £1 of pensionyou give up, you will receive £12 of lump sum.If you have BRASS funds these can be taken asa lump sum, up to HMRC limits.

Taking a cash lump sum will not affect thepensions your dependants may receive if youdie.

Level pensionYou might want to start taking your RPSbenefits before you are eligible to claim yourState Pension.

If so, the level pension option will help even outthe change in your income when you startclaiming your State Pension.

How?

� By drawing a higher Scheme pensionbefore you claim your State Pension;

� And a lower Scheme pension after youreach State Pension age (SPA).

Please note that the level pension availablewill be based on your State Pension age at thedate you start taking the level pension.

This option is not available if:

� You are within a year of SPA;

� You are over SPA;

� You receive an ill-health pension; or

� Your pension before or after SPA is belowthe minimum level.

You can tailor your benefits to meetyour personal needs when you retire.See the options below to work outwhat’s best for you.

12Options at retirement A guide for members

07/12 RPS 65 22 | 23

12 Options at retirement

Extra pension for dependantsA pension will be paid to any qualifyingdependants or eligible children when you die.However you may be able to give up part ofyour own pension to provide more pension fora named dependant. This must be your spouse,registered civil partner or other dependant.

This extra pension depends on your age andyour dependant’s age, is taxable, and increasesin line with Orders made under the Pensions(Increase) Act 1971 and Scheme Rules.

The payments will continue until yourdependant dies. However, if your dependantdies before you, you can’t change your decisionand will still receive only the reduced pension.

Taking your benefits early while workingYou may be able to claim your benefits early(from age 55) and continue working – as longas you are eligible and Network Rail agrees.

However, it’s important to note that:

� Your benefits will be reduced if you areunder age 65. The early retirementreduction factors will be applied on a ‘costneutral’ basis which is likely to result in agreater reduction than shown on page 21,even if you are a ‘protected person’;

� You will no longer be covered for the fourtimes pensionable salary death in servicelump sum, and you will not be eligible forill-health benefits;

� You also give up any right to be an activemember of the Section.

Additional Voluntary Contributions(AVC)If you have paid into BRASS, you must takethese benefits at the same time as your mainScheme benefits.

How your pension is worked outYour pension is:� your final average pensionable pay, less

75 per cent of the final average basic State Pension; or

� one half of your final average pensionablepay if it is more.

This figure is divided by 60 and multiplied bythe number of years’ and days’ membershipyou have in RPS 65. You can’t have more than40 years’ membership.

So, if:

� your final average pay is £20,000; and

� you have the full 40 years’ membershipat age 65;

� your pension will be:

Notes*£5,587.40 is the final average basic StatePension used for this example and representsthe basic State Pension as at April 2012.

Your pension may also include PensionableRestructuring Premiums (PRPs).

Your pension will be taxed in the same way asyour pay is taxed.

If you have membership before 7 April 1993,the pension worked out for the period before7 April 1993 is increased by 5%. If you haveextra membership because of a transfer-in,you may not receive the 5% increase onbenefits for this period of membership. You will have been advised about this in thetransfer terms provided at the time.

£20,000 - £4,190.55= £10,539x 40

60( )

Finalaverage

pay

Maximum years’membership of Scheme

75% finalaverage basi cState Pension* Your pension

income


If you were a member of the Section before 1 July 2012 and you decided to switch to thenew RPS 65 terms, this makes you a combinedmember of the Network Rail Section. This isbecause you have service on RPS 60 terms and

on RPS 65 terms going forward.

Below is a table summarising what this meansfor you, in respect of your pensionable serviceup to 30 June 2012 and from 1 July 2012.

13Combined membership

Combined membership

Your service up to 30.06.2012 Your service from 01.07.2012

Early Retirement

60 65

Your pension is reduced if itcommences before age 60.

Favourable early retirement termsapply if you are a 'protected person'.

For all other members these termsapply only for pre-July 2009 service;after this date the terms areon a different basis to age 60.

Your pension is reduced if itcommences before age 65 for servicefrom 1 July 2012.

Any membership in our Section of theRPS before this date will be treatedunder RPS 60 early retirement terms.

Early retirement terms for all memberswill be ‘cost neutral’ to age 65.

Section pay (usedto calculatecontributions andpension benefits)

This means that from July 2012,approximately £8,000 of yourpensionable pay is not included in your Section pay. Therefore, If youwere paid £20,000 your Section paywould be £12,000.

Lump SumAutomatic cash lump sum, in additionto the Scheme pension.

Pensionable pay less 150% of thebasic State Pension (BSP).

Pensionable pay less 75% of the basicState Pension (BSP).

Ill-health and deathin service pension

SMARTParticipation in the SMARTarrangement is compulsory.

Protected Personstatus

You gave up part of your protectedbenefits where the terms above aredifferent to RPS 60.

Normal Pension AgeYou can retire earlier or later than your Normal Pension Age

No automatic cash lump sum, butthe option of converting some of yourScheme pension to cash.

Added years of membership apply to a maximum of age 65.

Participation in the SMARTarrangement remains voluntary.

No change to Protected Personstatus.

A guide for members

This means that from July 2012,approximately £4,000 of yourpensionable pay is not included in your Section pay. Therefore, If youwere paid £20,000 your Section paywould be £16,000.

BSP usually increases each April

07/12 RPS 65 24 | 25

Important notes

14ImportantnotesRules and reportsEach year, you will receive a summary of theannual report and accounts, and an annualsummary funding statement for the NetworkRail Section.

You can request your Section’s full annualreport and accounts by writing to:

Customer Services TeamRPMIPO Box 300DarlingtonDL3 6YJ

Email: [email protected]

Please have your pension reference numberhandy when you contact RPMI.

You can also request copies of other Sectiondocumentation, such as the Section’s Rules,by writing to the address above.

If you are thinking of applying to take yourbenefits in the next 12 months or have anyqueries about your membership, contact ususing the details above.

If you have a complaint ordisagreementThe Scheme has a two-stage InternalDisputes Resolution Procedure (IDRP) forconsidering complaints and disagreements.

If you have a complaint, you should first write to:

Head of Rail AdministrationRPMIPO Box 300DarlingtonDL3 6YJ

Your complaint will be carefully consideredand you will receive a reply within twomonths. If you are not satisfied with thereply, you can take your complaint to theCommittee. You must do this within sixmonths of receiving the reply. They willconsider your complaint and contact youwithin two months.

The Pensions Advisory ServiceIf you are not satisfied with the reply to yourIDRP complaint, your first step is to take thematter to The Pensions Advisory Service(TPAS).

The Pensions Advisory Service (TPAS) is anindependent, mainly voluntary, organisationwith local advisers who are experts in pensionmatters. You can contact TPAS at any time tohelp you, or your dependants, with anydifficulties you may have with your pension orproblems that you have not managed toresolve with RPMI, the Trustee Company orthe Committee.

A guide for members


TPAS services are free of charge. Contact:

T: 0845 601 2923E: [email protected]

The Pensions Advisory Service11 Belgrave RoadLondonSW1V 1RB

W: www.pensionsadvisoryservice.org.uk

The Pensions OmbudsmanIf you are still dissatisfied after going throughour complaint process in full and TPAS cannotsort out your problems, you can contact thePensions Ombudsman. The Ombudsman isindependent and can investigate any complaint,or legal dispute, relating to your pensionscheme membership.

Please note that the Ombudsman will expectyou to have gone through our complaintprocess before considering your complaint.You can contact the Ombudsman using thefollowing details:

T: 0207 630 2200E: [email protected]

The Office of the Pensions Ombudsman11 Belgrave RoadLondonSW1V 1RB

W: www.pensions-ombudsman.org.uk

The Pensions RegulatorThe Pensions Regulator has a wide range ofpowers to help put scheme matters right ifproblems arise. The Regulator helps withprotecting members’ benefits with pensionschemes and monitors the Pension ProtectionFund. In extreme cases, the Regulator is able tofine trustees and employers and remove trusteesfrom a scheme. The Pensions Regulator’saddress is:

Napier HouseTrafalgar PlaceBrightonBN1 4DW

W: www.thepensionsregulator.gov.uk

Railways Pension Schemeregistration number: 10203279

Looking after your interestsThe RPS is a registered pension scheme withHM Revenue and Customs. Members havevaluable tax privileges, such as tax relief oncontributions, a tax-free lump sum if youchoose, while some investment returns arenot taxed, for example, capital gains.

Joining the SchemeThe Network Rail Section is open to allemployees under the age of 65 who have alegal right to join and to other Network Railemployees (including part-time employees)whose contract of employment allows themto join after a qualifying period, which iscurrently five years’ company service.

New employees who are potentially eligibleto join the Section must complete anapplication form and send it to the NetworkRail Pensions Team who will establisheligibility to join.

The application form is only available fromthe Network Rail Pensions Team.

E: [email protected]: 01908 781010

Ending your membershipYour membership will end if you: stopworking for Network Rail; choose not tocontinue being a member (referred to asopting-out); claim your benefits while stillworking for Network Rail; or reach 75.

14 Important notes

07/12 RPS 65 26 | 27

Data protectionRPMI and the Trustee Company use yourpersonal details to work out and pay yourbenefits. From time to time, they may need to give your information to otherorganisations, including Network Rail or anyprevious employer. These organisations mayuse your information for business purposes.

Unless RPMI holds and processes thisinformation, it cannot deal with and pay yourbenefits. If you have any objections to themusing your information in the way describedabove, please write to the Data ProtectionOfficer at RPMI. If you have no objections,they will assume that you agree to themusing your information. You have the rightto see the information RPMI holds about you.For a small fee you can have a copy of thispersonal information.

The Railways Pension Scheme was set up under the Railways Pension Scheme Order 1994 (SI 1994/1433) and is available to all thecompanies involved in the railway industry.

14 Important notes

Designed and produced by RPMI, Stooperdale Offices, Brinkburn Road, Darlington DL3 6EH

DNV Quality Assured Firm to ISO 9001

a guide for members · ‘indefeasible right’, under the railways act 1993, you will continue as...

Documents