Pension

[wiganrail]

Northern say they pay ''one and a half times the amount you contribute'' is there any cap on this amount?

 

[rhys37429]

you roughly pay 5% basic pension and Northern contribute towards it.

if you want to contribute more you join BRASS, and set up an additional contributions but Northern don't contribute to these pension contributions with BRASS.

 

[Tom Quinne]

Definitely open a BRASS account and pay in as much per week/mouth as you can afford it’ll pay dividends over the course of your career.

 

[falcon]

Northern say they pay ''one and a half times the amount you contribute'' is there any cap on this amount?

There is no cap and could not be a cap because the contributions are what is called a 40/60 split no matter what a person is paid.

The employee pays 40% of the contribution amount due and the employer pays the remaining 60% of the required amount of contrbution to give a 2/3rds salary pension including the state pension after 40 yrs of contributions. (That is the universal calculation that the railway pension applies)

The percentage paid by way of contribitions is different from company to company now (it was all the same under BR). As said if the employee is required to pay £1 the employer then pays £1.50 40/60 split.

Brass is what is called an additional voluntary contribution and is by way of choice of the employee.

To my knowledge now no company matches employes contribution for new entrants now. The matching was available where by the employee put in £1 and the employer put in £1 (free money) still in force for those already in. Brass has a cap on it though which is related to the amount you earn.

 

[westbrom]

Its a shame we cant transfer in our frozen pensions from before we joined the rail industry

 

[falcon]

All sections used to allow tranfers in. I know some stopped but I did not know it was all. Have you asked RPMI if your section allows transfers in.

Also what are these 'frozen' pensions you have. I hope they are not 'frozen' as if they are you should do everything you can to get the funds out. A 'frozen' pension makes no money for the member and is distroyed by inflation. The holder of the 'frozen' pension is making money on it all the time yet not passing it on to the member.

Are you sure it is not a 'defered' pension which is different to a 'frozen' pension as it still growes and is just defered until it can be collected.

 

[westbrom]

Yes they are deffered, just use the term frozen as no longer paying in.
Yes have rang rpmi, no joy,those joining from btp can transfer theirs in though

 

[Mag_seven]

Its a shame we cant transfer in our frozen pensions from before we joined the rail industry

I did when I joined the industry but that was in 1990.

 

[AndrewE]

Brass is what is called an additional voluntary contribution and is by way of choice of the employee..

Brass was introduced at the time of a surplus in the pension fund. The employers wanted to take a pension holiday (i.e. stop paying in) and the only way to get it accepted was to allow the employees some sort of access to the surplus too. If you could afford to put money in you got it matched by the pension fund. One clued-up colleague would always point out that it wasn't the employer giving you money, you were only getting access to what belonged to the staff anyway.
If you could only just make ends meet then you couldn't afford Brass contributions and had no way of getting the 100% (plus inflation/pension uprating) return on your money.

 

[Tractor2018]

The matching was available where by the employee put in £1 and the employer put in £1 (free money) still in force for those already in.

That was amazing. But it's still free money tbh, with the tax saving.

 

[AndrewE]

That was amazing. But it's still free money tbh, with the tax saving.

It was amazing but, as I said, it wasn't the employers putting anything in, it was taken from the pension fund surplus. If you had money to spare it was an astonishingly good bargain, if you had nothing to spare then you got nowt.

 

[falcon]

Brass was introduced at the time of a surplus in the pension fund. The employers wanted to take a pension holiday (i.e. stop paying in) and the only way to get it accepted was to allow the employees some sort of access to the surplus too. If you could afford to put money in you got it matched by the pension fund. One clued-up colleague would always point out that it wasn't the employer giving you money, you were only getting access to what belonged to the staff anyway.
If you could only just make ends meet then you couldn't afford Brass contributions and had no way of getting the 100% (plus inflation/pension uprating) return on your money.

That's wrong I don't know where you have got that from it looks like another attack on the employers the old chestnut "they raided the pension schem yer know" myth.

There were 3 stages that BRASS was introduced BRASS O for management. BRASS 1 for drivers prior to 1988 and BRASS 2 for all staff 1988 onwards.

In all cases the government was the employer and the fund had a surpluss of 135%.

The conservative governmant passed a law that no pension scheme could be more than 105% funded. As a result contributions were reduced for all members of the scheme and the by that time private companies had a holiday by not making employer contributions.

Brass was still matched right up to 1999 at least.

Then there was a shortfall in the scheme nothing to do with BRASS as it is a different fund completely. The scheme contributions went up by both the employer and the employee or and the retierment date was extended to beyoned 60 (the universal retierment age at that time).

So this clued up colleague was not so clued up more pissed of with his employer who he and like many others seem to think that the employers can get their hands on the pension funds.

No railway complany has any access to the pension funds they are all in a protected fund managed by railpen overseen by the pensions regulator then the trustees from each part scheme and the the individual pension committes of each company.

The pension fund is so safe that firts GNER went bust, pensions safe, then National Express went bust, pension safe, then Virgin Trains went safe, pension safe.

 

[falcon]

That was amazing. But it's still free money tbh, with the tax saving.

Don't forget you pay the tax on it when you get it back if you are over the tax threshold.
Also the annuity rate has dropped significantly over tha last 10yrs which is what you buy with the BRASS fund.

It really was a blow loosing the matching. I personaly think the unions should have made a bigger issue out of the fact the companies just over one weekend anounced that they were stopping the matching.

 

[Mag_seven]

I'm sure that the BRASS matching already mention was up to a limit - hence I contributed no more than the "maximum matching" amount. Either way AVC's such as BRASS were an excellent way of topping up your pension.

 

[falcon]

I'm sure that the BRASS matching already mention was up to a limit - hence I contributed no more than the "maximum matching" amount. Either way AVC's such as BRASS were an excellent way of topping up your pension.

Yes BRASS matching was up to a certain limit it was based on a percentage of basic pay. Over the limit it was not matched

Remember BRASS and the railway pension are two completely different funds.

BRASS was an add on that came into existance well after the railway pension had come into effect with the 2/3rd salary including the state pension after 40 yrs the initail aim of the scheme.

Lots of things have changed since the scheme came into existance yet old myths still exist regarding the railway pension.

The term 'final salary' is one of the myths. In reality an what will be delivered on retierment is a career average earnings scheme.

 

[AndrewE]

That's wrong I don't know where you have got that from it looks like another attack on the employers the old chestnut "they raided the pension schem yer know" myth...

Were you there? I was, I joined BR in 1974, went to talks on it when it was introduced and paid in to Brass in my last 5 or 10 years.

In all cases the government was the employer and the fund had a surpluss of 135%.

So what?

The conservative governmant passed a law that no pension scheme could be more than 105% funded. As a result contributions were reduced for all members of the scheme and the by that time private companies had a holiday by not making employer contributions.

Again, so what?

Then there was a shortfall in the scheme nothing to do with BRASS as it is a different fund completely. The scheme contributions went up by both the employer and the employee or and the retierment date was extended to beyoned 60 (the universal retierment age at that time).

Correct, but this is irrelevant

So this clued up colleague was not so clued up more pissed of with his employer who he and like many others seem to think that the employers can get their hands on the pension funds.

I think the BR Research union reps and especially their friends who were Pension Fund Trustees knew exactly what they were talking about.

No railway complany has any access to the pension funds they are all in a protected fund managed by railpen overseen by the pensions regulator then the trustees from each part scheme and the the individual pension committes of each company.

The pension fund is so safe that firts GNER went bust, pensions safe, then National Express went bust, pension safe, then Virgin Trains went safe, pension safe.

Yes BRASS matching was up to a certain limit it was based on a percentage of basic pay. Over the limit it was not matched
Remember BRASS and the railway pension are two completely different funds.

That's as maybe. It doesn't alter where the "employers contribution" originally came from

BRASS was an add on that came into existance well after the railway pension had come into effect with the 2/3rd salary including the state pension after 40 yrs the initail aim of the scheme.
Lots of things have changed since the scheme came into existance yet old myths still exist regarding the railway pension.

The term 'final salary' is one of the myths. In reality an what will be delivered on retierment is a career average earnings scheme.

Again, so what? Lots (most?) of the railway pensions that are being paid now are from a final salary scheme. It's not a myth, I am getting it. I agree that people paying in to the scheme now are on a career average scheme, which is probably a very good thing. The old final salary scheme was vulnerable to being raided by favoured management being given massive pay rises in the last couple of years, meaning that they got far more out of it than their contributions justified.
I think it has been said upthread that you can only have an annuity from BRASS. In fact you can - or you used to be able - to use it as your pension scheme lump sum and add the same amount back in to the pot to increase your pension. It sounds like splitting hairs, but you got a lot more from the pension scheme than you would have from an annuity.

 

[falcon]

Were you there? I was, I joined BR in 1974, went to talks on it when it was introduced and paid in to Brass in my last 5 or 10 years. So what? Again, so what?Correct, but this is irrelevant I think the BR Research union reps and especially their friends who were Pension Fund Trustees knew exactly what they were talking about.

That's as maybe. It doesn't alter where the "employers contribution" originally came from Again, so what? Lots (most?) of the railway pensions that are being paid now are from a final salary scheme. It's not a myth, I am getting it. I agree that people paying in to the scheme now are on a career average scheme, which is probably a very good thing. The old final salary scheme was vulnerable to being raided by favoured management being given massive pay rises in the last couple of years, meaning that they got far more out of it than their contributions justified.
I think it has been said upthread that you can only have an annuity from BRASS. In fact you can - or you used to be able - to use it as your pension scheme lump sum and add the same amount back in to the pot to increase your pension. It sounds like splitting hairs, but you got a lot more from the pension scheme than you would have from an annuity.

I don't know what your point is.

This is the crux of what is untrue in the statement you made in your original post.

Your words "The employers wanted to take a pension holiday (i.e. stop paying in) and the only way to get it accepted was to allow the employees some sort of access to the surplus too"

That is completely untrue. I explained why there was a holiday because the government said they fund could not be over 105% funded. Nothing to do with any decision by any TOC or BR at all.

Another point it matters not one jot if I "was there" where ever there is?, as the facts are what they are.

Further to the point before you ask "Were you there" I suggest you think about the answers you could receive to that question before you ask, otherwise you may make yourself look rather foolish.

I hope that helps brother,keep the red falg flying.

 

[AndrewE]

The point is that BRASS was invented to allow staff to benefit from the pension fund surplus as well as the employer. So the matching money was originally from the fund, certainly not paid from their own pocket out of the goodness of the employer's heart. Why can't you accept that?
When did you join the pension scheme and start getting briefings on it? My date was 6 months after joining BR in 1974. If you have not got any experience to justify your assertions, or any research or references that can back them up, I suggest that you are not very well qualified to comment - so unless you are a specialist post-graduate historian or economist I think your perception might be less valid than my memory.
You may be correct that the employer (BR at that time) stopped paying in due to an illegal over-funding situation, but it is still a fact that the surplus was also allowed to benefit the staff (those who could afford to take up the offer) by the invention of BRASS as well as the employers pension holiday.
I don't think the red falg flying (sic) has anything to do with it. I'm beginning to suspect that "where you were then" was still in your cot.

 

[Tractor2018]

Northern say they pay ''one and a half times the amount you contribute'' is there any cap on this amount?

Does anyone know if the Northern pension still final salary for new members?

 

[ItchyRsole]

There is no cap and could not be a cap because the contributions are what is called a 40/60 split no matter what a person is paid.

The employee pays 40% of the contribution amount due and the employer pays the remaining 60% of the required amount of contrbution to give a 2/3rds salary pension including the state pension after 40 yrs of contributions. (That is the universal calculation that the railway pension applies)

The percentage paid by way of contribitions is different from company to company now (it was all the same under BR). As said if the employee is required to pay £1 the employer then pays £1.50 40/60 split.

Brass is what is called an additional voluntary contribution and is by way of choice of the employee.

To my knowledge now no company matches employes contribution for new entrants now. The matching was available where by the employee put in £1 and the employer put in £1 (free money) still in force for those already in. Brass has a cap on it though which is related to the amount you earn.

Always wondered about this.

I currently pay in £250 pm

Are you saying my employer pays in £375 pm

Totaling my monthly pension pot up to £625 pm?

Thanks