15.02.08
Network Rail to launch new pension scheme
A third pension scheme, widening the choice for its 34,000 employees, has been unveiled by Network Rail.
The pension scheme will be a defined benefit arrangement, based on the average of an employees earnings, known as Career Average Revalued Earnings (CARE). This new pension gives Network Rail employees a wide choice of pension options - the best in the rail industry. Employees will be able to choose from:
• A defined contribution scheme - a type of private pension plan with employee contributions being flexible (from 0 to 4%)
• The new defined benefit scheme based on average earnings with employee contributions of around 6%
• The existing defined benefit scheme (Railway Pensions Scheme - RPS) based on final salary with employee contributions presently around 11% of pensionable pay
The move to introduce a new pension scheme follows a recent report from the Railway Pensions Commission that concluded that the existing industry wide defined benefit scheme could become unaffordable for all parties in the future and recommended that railway companies should seek to provide a more affordable defined benefit scheme.
Iain Coucher, Chief Executive, said: "This is about providing our employees with the very best options when making those difficult financial planning decisions. Pensions are very important to our people and we want to provide great pension choices that balance cost and benefits, enabling employees to make informed decisions about their future.
"Our new care scheme will give everyone another option when making retirement planning decisions, an option that is a good balance between cost to the individual and the benefits it pays out."
Tell us what you think – have your say below, or email us directly at [email protected]