Choosing the right pension scheme for Network Rail

[DanielD]

Im starting an apprenticeship with network rail and I have been given a choice between the NRDC and CARE schemes. Im 23 at the moment and will (hopefully) eventually be working in S&T. Any thoughts as to which is best? I really am a bit confused as to the difference between the two.

 

[High Dyke]

There is very little between them. However as with any financial advice please consult a person qualified to give such financial advice

I'm not sure if this site explains any better.
http://www.mynrpension.co.uk/Resources/Client/PML.NetworkRail/Templates/Home.aspx?DocID=2726&

Network Rail (NR) believes that providing great pension benefits is an important part of being a responsible employer that truly values its staff during employment, but which also wants to continue that support after retirement.

As such, we are proud to provide you with a range of pension options as demonstrated by the three schemes that employees can currently join: the Railways Pension Scheme (NR section); the NRDC defined contribution scheme; and NR CARE, our career average salary scheme which is a type of defined benefit arrangement.

NRDC

The NRDC is a defined contribution scheme, sometimes called ‘money purchase’. Each member has a Personal Retirement Account which contributions are paid into and at retirement the member can take up to 25% of the accumulated fund as a cash lump sum, and the balance must be used to purchase an annuity (pension) from an insurance company.

CARE

CARE was set up in November 2008 and is one of three company pension schemes operated by Network Rail. New and existing employees under age 65 can apply to join CARE by completing an application form.

CARE is a defined benefit scheme based on ‘Career Average Revalued Earnings’. This means the pension is calculated in ‘units’ based on a formula which takes account of the member’s pensionable salary for each year of pensionable service. One ‘unit’ is calculated each year (or part year); these are index-linked up to the date benefits are paid out. At retirement all ‘units’ are added together to provide an annual pension.

Sorry i can't be more helpful.

 

[The Planner]

If you ever get to 5 years then you get the choice of joining the RPS, i am no financial advisor but the vast majority join it due to it being one of the few final salary pensions left.