How investments work for BRASS and AVC Extra

Why investments matter to you

When you pay Additional Voluntary Contributions (AVCs) into BRASS or AVC Extra, that money is then invested into funds, with the aim of building your savings over time.

How these funds perform plays a significant part in determining how much money is in your BRASS or AVC Extra pot (known as your Personal Retirement Account or ‘PRA’) and whether its value goes up, or down. That’s why it’s important to understand your options and check your investments regularly to make sure they’re still working for you.

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Your DB pension

As a defined benefit (DB) member, the information on this page only applies to money you pay in to BRASS or AVC Extra. Your DB pension as a whole works differently and the benefits you receive do not depend on investment performance but on your length of service and salary.

You can find out more by logging in to your myRPS account and checking your Member Guide in the My Library section.

Your investment choices

The first choice you need to make for your investments with BRASS and AVC Extra is how hands-on you want to be.

Do you want to:

have your investment choices managed for you? We call this a Lifestyle strategy.
make all of the investment decisions yourself, choosing from the range of investment funds on offer?
or a mix of both?

You can find out about Lifestyle strategies and investment funds below. If you don’t make a decision, you will automatically be invested in a Lifestyle strategy.

Have your investments managed for you with a Lifestyle strategy

If you don’t feel comfortable looking after your investments directly, you can opt for a more ‘hands-off’ approach and choose a Lifestyle strategy.

How a Lifestyle strategy works

Lifestyle strategies build your pension savings when you are younger and reduce the risk of a fall in value as you near retirement. They do this by investing in a selection of underlying funds and changing your allocation to each fund as you get closer to your ‘target retirement age’ (TRA). While you are still a long way from retirement, more of your money will be allocated in higher-risk funds to try to help them grow more. As you get within 10 years of your TRA, your money will gradually be moved into lower-risk funds to help reduce the risk and protect the value of the pension pot you've already built up.

Your TRA can be earlier or later than when you would normally take your pension. If you do not chose a TRA then your Normal Retirement Age (NRA) may be used instead.

You can read more about how to check and change your TRA on the following pages:

Your Target Retirement Age (TRA)

You can set, check, and change, your TRA when you log in to your myRPS account. Go to ‘My Pension’, then ‘Funds’ and 'Change Target Retirement Age.'

Choosing a Lifestyle strategy

There are 3 Lifestyle strategies offered by the Scheme:

Annuity Purchase Lifestyle strategy
Flexible Drawdown Lifestyle strategy
Full Cash Withdrawal Lifestyle strategy

You can learn more about each of these on the BRASS fund choices and AVC Extra fund choices pages.

Which Lifestyle strategy you choose should be based on how you might want to use your BRASS or AVC Extra pot when you retire. For more information visit:

Based on your chosen strategy, your Additional Voluntary Contributions (AVCs) will be invested on your behalf by the Trustee.

Check your choices regularly

It’s really important that you take an active interest in your investment choices and review them regularly. No investment is 100% safe and you may want to change your choices depending on your circumstances or world events. You are still able to change your fund choices even if you are no longer paying into BRASS or AVC Extra.

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Manage your investments yourself, choosing from a range of funds

If you feel comfortable looking after your investments and want to be more hands-on, you can manage your investments by yourself.

You choose:

which funds to invest in, based on the list below
how much of your AVCs you want to invest in each fund

Your fund choices

There are 7 funds to choose from:

Corporate Bond Fund
Deposit Fund
Global Equity Fund
Long Term Growth Fund
Socially Responsible Equity Fund
UK Government Fixed-Interest Bond Fund
UK Government Index-Linked Bond Fund

Fund risk ratings and what they mean for you

Each fund has a different objective and risk rating, so you can choose the one that’s right for you. Risk ratings range from low to high.

Please check your investment choices to make sure you are comfortable with the level of risk you decide to take.

Higher risk funds are expected to get higher returns, but they could also drop more sharply in value. Lower-risk funds are less likely to grow much in value but are also more stable so less likely to drop in value. You might want to consider higher risk funds if you're further from retirement and are willing to take a bit more risk for potentially higher rewards.

All funds can experience rises and falls over the short to medium term. The higher the risk rating, the larger the rises and falls are likely to be.

You can find out about each of the investment funds, including their risk ratings, on the following pages:

Fund risk ratings

You can find the risk ratings for each of the funds on the fund risk ratings page.

Check the fund risk ratings

Approaching retirement? Check your investment funds

If you choose this hands-on investment funds approach, your money will not automatically move from high to lower-risk funds as you get closer to retirement. This means it’s up to you to choose if and when that’s necessary, and to make the investment fund switch yourself.

Checking and changing your investment choices

check and change your investment choices. Log in and go to 'My Pension' and then the 'Funds' page
check, and change, your Target Retirement Age (TRA) if you're invested in a Lifestyle strategy
if you have BRASS, try the Pension Planner. It will help you to understand the impact of changing your TRA, including the allocation of your pot between investment funds and the risk profile of your investment.

You may also want to speak to an Independent Financial Adviser (IFA) before making any changes.

Visit the guidance and advice page for help finding an IFA.

You can also find more information about how to check and change your investment choices on the following pages:

What to read next...

BRASS fund choices

Learn more about the different investment options available to you within BRASS.

AVC Extra fund choices

Learn more about the different investment options available to you with AVC Extra

Fund risk ratings

Learn which funds are low, medium and high risk and why that matters.

Disclaimer

Railways Pensions is powered by Railpen Limited
© Railpen Limited 2010-2024. Registered Office: 100 Liverpool Street, London EC2M 2AT
Each of Railpen Limited (registered in England and Wales No. 2315380) and Railway Pension Investments Limited (RPIL) (Registered in England and Wales No. 1491097) is a wholly owned subsidiary of Railways Pension Trustee Company Limited (Registered in England and Wales No. 2934539). Registered office for each company: 100 Liverpool Street, London EC2M 2AT. RPIL is authorised and regulated by the Financial Conduct Authority for some of its activities. The administration of occupational pension schemes is not a regulated activity. Full details about the extent of RPIL's authorisation and regulation by the Financial Conduct Authority are available from us on request.