Our approach to investing

Learn more about how the Scheme makes its investment decisions.

How do investments affect the Scheme?

The Railways Pension Scheme (RPS) has more than £30 billion in assets, making it one of the UK’s largest pension schemes. For defined benefit (DB) pensions – which includes most Sections of the Scheme – the money that members and employers pay in is pooled together, managed and invested in-house by Railpen’s award-winning investment team.  

A closed steel safe

While this is quite unusual for a UK pension scheme, managing assets in-house, involving external partners where appropriate, ensures that Railpen has efficient and effective oversight of its investments. It also ensures that Railpen can consistently apply a set of Investment Beliefs (see below) in the interests of the Scheme and its members. Ultimately this results in better outcomes for members as, while part of the Scheme's assets come from the money (or ‘contributions’) that members and their employers pay in, a large proportion is from returns on investments. You can read more about where we invest, and why, on the where we invest page. 

Investments work differently for defined benefit (DB) pensions and defined contribution (DC) pensions. DC pensions include the IWDC Section and the BRASS and AVC Extra Additional Voluntary Contributions arrangements. You can find out more about these investments on the ‘How my investments work’ pages for IWDC members or for BRASS and AVC Extra members. 

Railpen is here to secure members' future. Everything it does focuses on achieving this – from investment returns to its impact on the wider environment and communities. 

Investment Beliefs

All of Railpen's investment decisions are outcome-oriented – they focus on the needs of the Scheme and its members, and they adhere to a set of ‘beliefs’. These beliefs help the Investments team stay focused on the mission to pay members pensions securely, affordably and sustainably. 

Did you know?
The 6 Investment Beliefs are that:

  1. Managing asset-liability risk is integral to a scheme's long-term success. 

  1. Long-term focused investment decision-making has many advantages that should be carefully exploited. 

  1. Diversification of the overall investment portfolio, across different structural drivers of return, improves the resilience of a scheme's assets in an uncertain world. 

  1. Incorporating and acting upon climate risk and other environmental, social, and governance factors is a significant driver of investment outcome and part of our fiduciary duty. 

  1. Effective portfolio management requires flexibility around a thoughtfully considered investment strategy. 

  2. Investments should be selected, structured and sized in a manner aligned to a scheme’s long-term objective.

These beliefs help Railpen to maintain discipline through turbulent times but empower the team to react to risk and performance insights from its portfolios and the wider markets. The primary goal is to remain focused on delivering strong returns for members over the long term – ensuring it secures its members' futures.

You can learn more about Railpen's investment beliefs in this short, introductory video.

Statement of Investment Principles

The Statement of Investment Principles (SIP) sets out principles governing how decisions about investments are made.

The Statement of Investment Principles, for all Scheme investments, will be reviewed by the Trustee at least every three years or after any significant changes in the investment approach.

Sustainable Ownership

For decades Railpen has sought to invest sustainably – prioritising long-term growth for our members alongside environmental, social and economic benefits to the wider world. 

Railpen has its own approach to incorporating sustainability issues, such as climate change and executive pay, into the investments it manages on your behalf.

Stewardship Report 

The Stewardship Report builds on progress by Railpen’s award-winning Sustainable Ownership team and considers four priorities:

  • the Climate Transition
  • Worth of the Workforce
  • Responsible Technology, and;
  • Sustainable Financial Markets

It also provides practical examples, with case studies of the Scheme acting as a responsible investor across its investment portfolios.

Sustainable Ownership
How does Sustainable Ownership affect investments?

Find out how Sustainable Ownership can help achieve better investment returns as well as having a positive influence on the world around us.

Net zero

Railpen has committed to be net zero by 2050 or sooner and has produced a Net Zero Plan. The plan covers both the investment portfolio and the emissions associated with its corporate footprint. Along with institutional peers, Railpen has co-signed the Paris Aligned Investment Initiative’s Asset Owner Net Zero Commitment.

You can read the Net Zero Plan on the Reports page of the Railpen website.

What to read next...

Where we invest

Find out where we invest, including in private markets, public markets and real assets, and why we take this approach

Investments glossary

Here's a handy list defining some of the different terms used when talking about investments. 

Sustainable Ownership

Learn more about the work we've done to incorporate sustainability into the investments we manage, while still aiming for the best possible financial returns.