Railway Pension Scheme

[Step3 Star]

Not sure if it's already been mentioned or in the RMT Strike notes.

Having read the (unofficial??) proposed changes to the RPS that says they will be putting up the retirement age for non protected staff from 62 to 65 from February 2023, and that new starters without previously being a member of the RPS can't join for two years.

As a non protected staff member I was looking at retiring or going P/T and rejoining the pension scheme at 62 so these proposals are obviously worrying for me.

I did speak to RPS today regarding this and they claim that the 65 retirement age would only apply to new starters. Not sure if you would be able to rejoin the pension scheme if you did take your pension at 62 & went P/T.

 

[michael74]

Not sure if it's already been mentioned or in the RMT Strike notes.

Having read the (unofficial??) proposed changes to the RPS that says they will be putting up the retirement age for non protected staff from 62 to 65 from February 2023, and that new starters without previously being a member of the RPS can't join for two years.

As a non protected staff member I was looking at retiring or going P/T and rejoining the pension scheme at 62 so these proposals are obviously worrying for me.

I did speak to RPS today regarding this and they claim that the 65 retirement age would only apply to new starters. Not sure if you would be able to rejoin the pension scheme if you did take your pension at 62 & went P/T.

I suspect you won't get a straight answer until an official proposal is made and offered to the members. I was in the NHS 1985 final salary scheme (with a retirement age of 55), it was firstly closed to new members and an average salary scheme with with retirement age linked to state pension was commenced (2005 scheme). We were offered to move to that, unsurprisingly not many took the offer..... A few years later it was then closed to all except if you were within 10 years of 55 and we were forcibly placed into the 2005 scheme. which means I have ½ a pension I could draw on at 55 and half at (currently 67) and in a few years half of a railway pension (whatever that will look like...)

 

[station_road]

This will be different for different sections of the scheme, as they all have different rules - Network Rail only let new starters join after 5 years for example, but have said they have no plans to change their section of the RPS as it is currently well funded

 

[Exscrew]

Is it just me who finds it kind of a joke that when you join a job you sign up for a particular set of terms and pension, but this can just be changed for the worse as you go along.

 

[AntoniC]

Is it just me who finds it kind of a joke that when you join a job you sign up for a particular set of terms and pension, but this can just be changed for the worse as you go along.

Its happened to me 3 times in the Civil Service and you will be shocked to hear that none of the changes really benefit to me.
I am not leaving though with 34 years in.

 

[Exscrew]

Its happened to me 3 times in the Civil Service and you will be shocked to hear that none of the changes really benefit to me.
I am not leaving though with 34 years in.

I had similar stuff while working for HMPS
I find it remarkable that so many negative changes are sold under the umbrella of Modernisation.

 

[Step3 Star]

Yes like the modernisation umbrella is really the government code name for the desolation umbrella.

 

[ItchyRsole]

Modernisation = cuts

 

[Exscrew]

In my mind Modernisation means less hours ,better pay, better perks to encourage a healthy lifestyle etc.
In the governments eye it means cuts and more hours for less pay.
Oh well back to the victorian era we go... I may grow a moustache.

 

[falcon]

Is it just me who finds it kind of a joke that when you join a job you sign up for a particular set of terms and pension, but this can just be changed for the worse as you go along.

The defined Benefit schemes cannot be 'Just changed'.

Most of the TOC have pensions committees that will discuss why a condition/contribution needs to be changed. These changes come about because of shortfalls in the scheme and the fact that people are living a lot longer than the scheme was designed for.

If there is a pension committee they will agree a change with all the unions involved RMT,TESSA,UNITE,ASLEF, one non union rep and one retired members rep, 6 reps and six on management side, usually directors.

Then that change is put to the Trustees of Railpen who hold all the money in the pension funds. The trustees will usually accept the change that the pension committe made.

The pension regulator can stop the change if he thinks there is anything detrimental ect with the change.

This is the beauty of a 'Defined BENEFIT' scheme, as apposed to a 'defined CONTRIBUTION scheme.

With the defined contribution scheme you only ever know what you pay (contribution) and never what you will get. There are no negotiations, you just get what you get. If lucky 1% over what you would have got in a building society, they take the rest for themselves.

A defined benefit scheme means you have a known amount that you will receive on retirement. If there is a claimed shortfall, all the parework/document/committes and trustees are involved and can see that the shortfall is valid. Then there are options that can be taken to make sure that the defined benefit is achived on retirement.

In the past when the pension fund was at 135% contributions were cut. Gone are those days.

 

[matacaster]

Is it just me who finds it kind of a joke that when you join a job you sign up for a particular set of terms and pension, but this can just be changed for the worse as you go along.

Does your contract say you will get wage increases at all or in relation to inflation? If not arguably that's a change (for the better) which employers might argue is a change to your contract terms and you can't have one.

 

[Starmill]

Is it just me who finds it kind of a joke that when you join a job you sign up for a particular set of terms and pension, but this can just be changed for the worse as you go along.

This is the advantage of a group personal pension. Once the contributions are made the value of the account is yours to do with whatever you choose and nobody can amend the terms. Of course, in general such pensions will require a larger appetite for risk if you want to earn comparable returns with a defined benefit scheme such as the Railway Pension Scheme.

Unfortunately it's one of those things in life, there are advantages and disadvantages to both main options.

Royal Mail are pioneering a 'third way', a hybrid option called a Collective Defined Contribution scheme.

In addition to your occupational pension, it's worth knowing that you may also open self-invested personal pensions with any provider you like! You will still benefit from the relevant tax reliefs.

With the defined contribution scheme you only ever know what you pay (contribution) and never what you will get. There are no negotiations, you just get what you get. If lucky 1% over what you would have got in a building society, they take the rest for themselves.

Most providers will let you change the funds and approach to risk. They also should provide "lifestyling" where the appetite for risk declines gradually in the last 15 or 10 years before retirement. This means that you actually can forecast with some confidence what the value of your pension account is going to be at your retirement date.

 

[Snow1964]

Is it just me who finds it kind of a joke that when you join a job you sign up for a particular set of terms and pension, but this can just be changed for the worse as you go along.

But I doubt you would want your package unchanged, still on pay rate from when you started etc.

The other thing is if you ever accept promotion, you accept new terms and conditions, which rather gives an opportunity to update some others terms at same time. I suspect you have only ever been offered promotion (so your choice to accept or not) rather than being forced to take it.

 

[Watershed]

Is it just me who finds it kind of a joke that when you join a job you sign up for a particular set of terms and pension, but this can just be changed for the worse as you go along.

There is no such thing as a job for life, or indeed a set of conditions for life. After all, I'm sure you would not want to stay on the same pay for 40 years...

The reality is that even 65 is below the State Pension age and so in some respects, it is still quite generous. You retain the ability to retire as early as 55 if you want. It is just that retiring this much earlier comes at a cost.

Where I do think there's legitimate cause for complaint is that with the RPS, when a change to the NRA happens (as is proposed here), the 'new' and 'old' parts of your pension can't be taken separately. So you can't take the pre-Feb 23 part of your pension at 62 and the post-Feb 23 part of your pension at 65.

This means that you either have to take both parts at 62 and suffer a disproportionate reduction for the post-Feb 23 part for taking that 3 years 'early', or take both parts at 65 and only get a meager increase for the pre-Feb 23 part despite taking that 3 years 'late'. Or some combination of the two.

I think that it should at least be allowed to take the two parts separately, without having to incur disproportionate early retirement factors or meager late retirement factors.

 

[Snow1964]

Where I do think there's legitimate cause for complaint is that with the RPS, when a change to the NRA happens (as is proposed here), the 'new' and 'old' parts of your pension can't be taken separately. So you can't take the pre-Feb 23 part of your pension at 62 and the post-Feb 23 part of your pension at 65.

This means that you either have to take both parts at 62 and suffer a disproportionate reduction for the post-Feb 23 part for taking that 3 years 'early', or take both parts at 65 and only get a meager increase for the pre-Feb 23 part despite taking that 3 years 'late'. Or some combination of the two.

I think that it should at least be allowed to take the two parts separately, without having to incur disproportionate early retirement factors or meager late retirement factors.

What will happen in reality is that those near retirement age (or more strictly anyone over 55) will face a choice : retire now with reduced amount per month, or carry on working knowing that won’t get much of increase in pension.

Some will have paid off their house, have saved some money, and will take the money having done about 35 years work. And will be able to live off the reduced pension and savings until they get to 67 when state pension starts paying them about £180 per week. Others will need to work on. (It might also be influenced by what age a partner is retiring at)

Regarding state pension, you basically need 35 qualifying years of NI to get it in full, (might be more if have contracted out years). If don’t have enough years it gets apportioned, so get less. (Anyone can check online on Government pension checker, using NI number and Tax return gateway login) if unsure how many years they have built up. It is usually also possible to buy some recent missing years (generally a good idea, as cost is recovered in about 3 years, as extra pension, and likely to draw state pension more like 20 years so likely to get back about 6 times the extra years you buy.

Whilst longer term the change will make pension more affordable for employers as people live longer, there is a short term risk that all those with decades of skills and knowledge all leave at similar time which can leave a skills vacuum.

 

[the sniper]

The reality is that even 65 is below the State Pension age and so in some respects, it is still quite generous.

Not much comfort in that given how quickly it'll have gone from 60 to 65 for many, we should assume it'll be 67 before too long, 70 not long after... I doubt most will get much out of it, I can imagine there being a generation that won't live up to their ever increasing life expectancy predictions, by which point any recalculation will be too late.

 

[Signal_Box]

This will be different for different sections of the scheme, as they all have different rules - Network Rail only let new starters join after 5 years for example, but have said they have no plans to change their section of the RPS as it is currently well funded

The only section is substantial surplus, itself a risk !

 

[AndrewE]

Already no need to delay pension payments: https://www.imperial.ac.uk/news/231119/life-expectancy-declining-many-english-communities/
(Life expectancy declining in many English communities even before pandemic) says

A substantial number of English communities experienced a decline in life expectancy from 2010-2019, Imperial College London researchers have found.


In the five years before the pandemic (2014-2019) life expectancy went down in almost one in five communities for women, and one in nine communities for men, according to the new study published in The Lancet Public Health journal and funded by the Wellcome Trust, Imperial College London, the Medical Research Council, Health Data Research UK and the National Institute of Health Research.
The new study is the first to analyse longevity trends in ultra-fine detail and could identify where life expectancy declined with much more precision than before. The researchers tracked life expectancy in communities of around 8,000 people, while other statistics are typically based on much larger areas (such as local authority districts, which have a median population of around 140,000 people).


They found that communities with the lowest life expectancy (below 70 and 75 years for men and women, respectively) were typically situated in urban areas in the North of England.


Although recent data from the Office for National Statistics found that life expectancy for men in the UK had fallen for the first time in 40 years due to the COVID-19 pandemic, the new research shows that life expectancy was declining in many communities years before the pandemic began.
Senior author, Professor Majid Ezzati from the School of Public Health at Imperial College London, said: “There has always been an impression in the UK that everyone’s health is improving, even if not at the same pace. These data show that longevity has been getting worse for years in large parts of England.”


“Declines in life expectancy used to be rare in wealthy countries like the UK, and happened when there were major adversities like wars and pandemics. For such declines to be seen in ‘normal times’ before the pandemic is alarming, and signals ongoing policy failures to tackle poverty and provide adequate social support and health care.”

Shift work does not let you look forward to a long or a good retirement either.

 

[Vespa]

My work has changed their pension scheme three times from final salary to defined benefit then to defined contribution.

Our pension would have been in a much better place if Gordon Brown hadn't taxed the pension scheme surplus, he's the man who robbed your old age while he is fine and dandy on a very generous taxpayer funded MP pension scheme.

 

[Efini92]

Not sure if it's already been mentioned or in the RMT Strike notes.

Having read the (unofficial??) proposed changes to the RPS that says they will be putting up the retirement age for non protected staff from 62 to 65 from February 2023, and that new starters without previously being a member of the RPS can't join for two years.

As a non protected staff member I was looking at retiring or going P/T and rejoining the pension scheme at 62 so these proposals are obviously worrying for me.

I did speak to RPS today regarding this and they claim that the 65 retirement age would only apply to new starters. Not sure if you would be able to rejoin the pension scheme if you did take your pension at 62 & went P/T.

They should change the rules to stop people taking their pension then rejoining the scheme.
It’s not fair for the younger end that you’re taking your pot then potentially a death in service payment.