Oh No A Pensions Question ( GWR )

[cancatsdance]

I have been over the many painful threads looking for an answer but most are out of date or people with no knowledge hedge a guess.

Just wanting to know if its based on final salary etc , im looking at trying to work out likely income if i served 10 years as a driver.

Some posts state years served x salary / 1/60 im just non the wiser

 

[S-Car-Go]

The railway pensions scheme is final salary. It might be an umbrella that all the TOCs come under, but should all be final salary.

 

[PupCuff]

The railway pensions scheme is final salary. It might be an umbrella that all the TOCs come under, but should all be final salary.

Sort of. I don't know whether any sections of the RPS are still 'true' final salary, but many were changed five years or so back to raise the age of retirement from 60 to 62 and to impose a limit on how much your pensionable pay could rise by each year, and introduce the concept of restructuring premiums which are increases which only count towards your pension from the time they came into effect, not from the start of service.

With the important caveat that I am not qualified to provide financial advice and you are encouraged to seek the assistance of a professional financial advisor:

For instance (note: simplification not taking into account inflation), if a cleaner started on £20,000 for ten years, and then became a Driver on £60,000 for ten years before retiring, it would not be calculated as (20 years service / 60)*£60,000 = £20k/annum, it would be calculated as (20 years / 60)*£20,000 + (10 years / 60) * £40,000 = £6.6k/annum + £6.6k/annum = £13.2k/annum.

If you served 10 years as a Driver before retiring - assuming GWR use the same system as above used in other TOC RPS sections, then your likely pension income would be:
The salary you started on, increased by RPI+0.25 each year * (10/60)
Plus, each time you received a pay increase, the value of that pay increase from the day it was counted as pensionable earnings * (years since that happened/60).

 

[cancatsdance]

If you served 10 years as a Driver before retiring - assuming GWR use the same system as above used in other TOC RPS sections, then your likely pension income would be:
The salary you started on, increased by RPI+0.25 each year * (10/60)
Plus, each time you received a pay increase, the value of that pay increase from the day it was counted as pensionable earnings * (years since that happened/60).

Most helpful thanks... Im only looking at driver so rough maths make it 10k after 10 years and of course you have BRASS and AVC to help so all looks good

 

[4F89]

Its /40 isn't it? As you cant possibly do 60 years service

 

[S-Car-Go]

Thanks @PupCuff for your input. I'm at the point of choosing what to do with my pension after changing TOCs. I didn't realise it had changed in that way.

I've been at station staff salary for 15 years, and now on a driver's salary, hopefully for the next 15-20! And I noticed the retirement age had increased from 60 to 62. I have a choice. Keep the pensions separate, the 1st gets paid at 60yo, and the 2nd at 62. Or combine them, get everything at 62, + 7 years "special terms" on the 1st pension. Hmmm....

 

[greatkingrat]

Its /40 isn't it? As you cant possibly do 60 years service

No, you divide the salary by 60. So if you had 40 years service you would end up with a pension of 2/3 of your final salary.

 

[4F89]

No, you divide the salary by 60. So if you had 40 years service you would end up with a pension of 2/3 of your final salary.

Oh right, interesting. But that would be 40/60 of your final basic salary, or 40/60 of your average basic? Or indeed total salary inc OT?

 

[greatkingrat]

Originally it would have been final basic salary, but as mentioned above it is a bit more complicated than that now.

 

[PupCuff]

Thanks @PupCuff for your input. I'm at the point of choosing what to do with my pension after changing TOCs. I didn't realise it had changed in that way.

I've been at station staff salary for 15 years, and now on a driver's salary, hopefully for the next 15-20! And I noticed the retirement age had increased from 60 to 62. I have a choice. Keep the pensions separate, the 1st gets paid at 60yo, and the 2nd at 62. Or combine them, get everything at 62, + 7 years "special terms" on the 1st pension. Hmmm....

What I would say is, check your individual section rules, I know a number of TOCs moved across but that is not to say all did, also for a situation like that independent financial advice is of a lot of benefit, saves a costly mistake later on down the line.

 

[ComUtoR]

I thought that 40/60ths was maximum pension ? Maximum pension is 40yrs with a %penalty per year taken early (on a varying scale)

 

[PupCuff]

I thought that 40/60ths was maximum pension ? Maximum pension is 40yrs with a %penalty per year taken early (on a varying scale)

This is correct.

I'm not sure off the top of my head how it's handled when you reach your 40 years though if you haven't yet reached retirement age, and I don't have my section rules handy to check. I don't have to worry about that for a few years yet anyway, and in any case it will almost certainly have changed by then!

 

[ComUtoR]

I'm not sure off the top of my head how it's handled when you reach your 40 years though if you haven't yet reached retirement age,

At my TOC they simply stop paying their pensions. We have more than a few who have reached their 40 but have decided to stay on. There are various considerations when deciding to take your pensions or not.

 

[theironroad]

Oh right, interesting. But that would be 40/60 of your final basic salary, or 40/60 of your average basic? Or indeed total salary inc OT?

Overtime is not included and neither are things like regional allowances usually.

The pension isn't based on careeer average.

 

[4F89]

Overtime is not included and neither are things like regional allowances usually.

The pension isn't based on careeer average.

So you get

(final basic salary)*(years in)*40/60 ?

Plus whatever BRASS, correct?

 

[JonathanH]

So you get

(final basic salary)*(years in)*40/60 ?

Plus whatever BRASS, correct?

Don't forget the basic state pension offset / integration.

 

[4F89]

Don't forget the basic state pension offset / integration.

State offset? So state included in final sum?

 

[theironroad]

So you get

(final basic salary)*(years in)*40/60 ?

Plus whatever BRASS, correct?

As greatkingrat mentions in post #9, it's gotten more complicated.

Traditionally, if you did 40 full years in a final salary scheme you'd retire on two thirds of your final salary. Tbh, I'm not sure how the state pension factors into that.

However, railway pensions (not sure about other schemes) often use 'restructuring premiums' whereby not all of the cash salary is pensionable.

A few years ago a deal was done between Unions and tocs which limited pensionable pay for past service to a small % above a given month's RPI inflation. So the calculations be more complicated as it's possible to have many restructuring premiums in your personal retirement account.

 

[4F89]

As greatkingrat mentions in post #9, it's gotten more complicated.

Traditionally, if you did 40 full years in a final salary scheme you'd retire on two thirds of your final salary. Tbh, I'm not sure how the state pension factors into that.

However, railway pensions (not sure about other schemes) often use 'restructuring premiums' whereby not all of the cash salary is pensionable.

A few years ago a deal was done between Unions and tocs which limited pensionable pay for past service to a small % above a given month's RPI inflation. So the calculations be more complicated as it's possible to have many restructuring premiums in your personal retirement account.

Mind = Blown

 

[tiptoptaff]

Fortunately, the annual estimate gives an idea of what you're looking at getting when you retire

 

[Coach Carter]

State offset? So state included in final sum?

I believe the state off set works as follows. Your salary, minus your state pension entitlement, then devide by 60, then times by your years service.
60k(basic salary) - 7k(yearly state pension) =53k, 53k / 60 = £883, £883 x 40 = 35k
That’s a very rough and rounded up working out though using made up figures.
Best seeking info from a financial advisor though rather than from muppets like me

 

[Coach Carter]

Forgot to say that’s based on someone getting the full 40 years in. If you do less I believe the amount taken off for your state pension entitlement becomes less.
But as I said best getting professional opinion/explanation as I could be completely wrong

 

[Becko]

Its /40 isn't it? As you cant possibly do 60 years service

Wanna bet? The senior man at my depot is in his 55th year! Lol

 

[Becko]

Following on from previous post:
Out of curiosity, does anyone know of a driver with longer service?

 

[4F89]

Wanna bet? The senior man at my depot is in his 55th year! Lol

55 years? Must not like his wife!

 

[Becko]

55 years? Must not like his wife!

This very wise man is, of course, not married! Lol

 

[Tom Quinne]

Start at 16, you could easily rack up 55 years. Why you’d want to work well into your late 60s or for 55 years I don’t know.

22 left can’t wait to get out.

 

[theironroad]

Start at 16, you could easily rack up 55 years. Why you’d want to work well into your late 60s or for 55 years I don’t know.

22 left can’t wait to get out.

If you're a good lad you might get early release for good behaviour

 

[Efini92]

Following on from previous post:
Out of curiosity, does anyone know of a driver with longer service?

There’s a driver at longsight who’s in his 70’s he started as a lad.