Blog
A deep-dive into a variety of pension topics to help you understand and learn more about your pension and the Scheme.
7/12/2023
Editorial
<p>You’re a preserved member (sometimes known as a deferred member) if:</p><ul><li>You HAVE stopped paying into the Railways Pension Scheme (RPS) </li></ul><p>But</p><ul><li>You HAVE NOT yet started taking your pension or transferred out. </li></ul><p>This means that even though you are no longer putting money into your pension, the benefits you have built up so far, remain in the Scheme until you are ready to take them. That’s why it’s so important that you understand your options and know what being a preserved member means for you. </p><p>Look below for a summary of what you really need to know as a preserved DB or IWDC member in the RPS. </p><p>If you’re not sure whether you’re in the DB or IWDC Sections of the Scheme you can <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">log in to your myRPS account</a> anytime to find out. <a href="https://member.railwayspensions.co.uk/register" data-sf-ec-immutable="">You can also register for an account</a> for free if you haven’t already.</p><p> </p><h2>I’m a Defined Benefit (DB) preserved member – what do I need to know?</h2><h4><strong>1. Your pension will be based on when you stopped paying in</strong></h4><p>The RPS defined benefit Sections are mostly ‘final salary’ schemes. They give you a regular, guaranteed annual income for life, based on your salary and how long you’ve been a member of the scheme. This is, payable from a specified date, however, you may have scope to take it early or late. </p><p>The DB part of the Scheme also includes some Career Average Revalued Earnings (CARE) arrangements where your pension is based on your earnings right across your membership. </p><p>In both cases, as a preserved member, your pension will be based on your final or final average salary, and length of membership at the point you stopped paying in. </p><p>Even though you’re no longer paying in, your preserved pension may still increase, in line with the Scheme rules to protect it against inflation. </p><p><a href="https://member.railwayspensions.co.uk/defined-benefit-members/im-still-working/new-to-the-scheme" data-sf-ec-immutable="">For more general information on how a DB scheme works, visit the I’m new to the Scheme page.</a></p><h4>2. You cannot pay into BRASS, but your previous AVCs remain invested.</h4><p>As a preserved member you can no longer pay into your pension, either in the form of regular contributions, or Additional Voluntary Contributions (AVCs). </p><p>However, any AVCs you have already paid into BRASS or AVC Extra, will remain invested. This means their value can go up or down. </p><p>You should keep an eye on your fund choices to make sure they’re still suitable for you. </p><p>As a preserved member you can still check and change your BRASS or AVC Extra funds at anytime. <a href="https://member.railwayspensions.co.uk/defined-benefit-members/saving-more-BRASS-AVC-Extra/managing-my-BRASS" data-sf-ec-immutable="">You can find out how to do that on the managing my BRASS page.</a> </p><p>You may also be able to transfer the money in your BRASS pot or AVC Extra funds to another arrangement. For more information, check the <a target="_blank" href="https://cdn3.railpen.com/mp-sitefinity-prod/docs/default-source/rayn/guides-for-db-members---active-and-preserved/transfer-options.pdf?sfvrsn=54d41644_13">Read as You Need guide to transfer options for DB members</a>.</p><h4>3. Your loved ones could be taken care of when you die.</h4><p>If you die before taking your pension, a tax-free lump sum could be paid to those you care about. For preserved members, this lump sum is typically the lower of either: </p><ul data-list="1" data-level="1"><li>5 times your yearly basic pension or</li><li>4 times your Pay (this is Final Average Pay for some sections)</li></ul><p>Plus, any BRASS and AVC extra funds.</p><p>You can tell the Trustee who you would like the lump sum to be paid to, by making a nomination when you <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">log in to your myRPS account</a>. You should also remember to update your nominations if/when your circumstances change. The Trustee will take your wishes into consideration, when deciding who should receive the payment.</p><p><a href="https://member.railwayspensions.co.uk/pension-essentials/nominations" data-sf-ec-immutable="">Find out who you can nominate, and how, on the nominations page</a> </p><p>Your dependants, such as your family, may also be eligible to get a pension.</p><h4>4. You may be able to transfer if you want to</h4><p>If you join another Section of the RPS, for example if you change employers, then you may be able to transfer your preserved benefits from your previous section into your new ‘active’ section. </p><p>If you do this within 15 months of leaving your previous section then special terms may apply. </p><p>You may also be able to transfer your benefits to another scheme all together, as long as that scheme accepts transfers in and is registered with HMRC. </p><p>You should think this through carefully before making a decision and consider that a transfer may not be in your best interests. You may want – or need – to get advice first.</p><p><a href="https://member.railwayspensions.co.uk/pension-essentials/transferring-my-pension" data-sf-ec-immutable="">Visit the transferring in or out page for more information.</a></p><h4>5. You decide WHEN to take your pension.</h4><p>Your Normal Retirement Age (NRA) is usually between 60 and 65 years old and will depend on the rules of your RPS section. You can find your NRA by logging into your myRPS account and looking at your ‘membership details’ or in your Member Guide. </p><p><span style="text-decoration: underline">Early retirement </span></p><p>You may be able to start taking your pension before you reach your NRA, with the Trustee’s agreement. This is known as early retirement and is usually allowed for members aged over 55. In some cases, this may be from age 50 if you have a Protected Pension Age (PPA) and have not previously opted-out of the RPS. You can read more about PPA and how it might affect your pension <a href="https://member.railwayspensions.co.uk/defined-benefit-members/Im-planning-to-take-my-pension/when-to-retire" data-sf-ec-immutable="">You can find this on the when to retire page.</a></p><p>If you take your pension before your NRA, your payments will be lower as early retirement factors are applied, which reduces your pension, reflecting the fact that it will be paid for longer. There are different early retirement factors for preserved members, which means the reduction may be greater than taking your pension on leaving service early as an active member. The reduction can be significant, and you can request an estimate by logging into your myRPS account. </p><p><span style="text-decoration: underline">Late retirement </span></p><p>As a preserved member your pension will be paid at your NRA, unless you choose to defer payment. </p><p>Deferring payment is where you opt to take your pension at a later date, which is known as late retirement. </p><p>You would typically need to apply for this between 3 months before, and 3 months after your NRA. And you must start taking your pension before the age of 75. </p><p><a href="https://member.railwayspensions.co.uk/defined-benefit-members/Im-planning-to-take-my-pension/when-to-retire" data-sf-ec-immutable="">You can read more on the when to retire page.</a></p><h4>6. You need to keep your details up to date.</h4><h4><strong></strong></h4><p>As a preserved member, keeping track of your pension could help you plan for the future and make sure you know what income you might have when you stop work. </p><p>We’ll send you a statement every year, so you can see how much your pension might be worth. You can also request an estimate or use the Pension Planner in your myRPS account. </p><p>It’s important you keep your details up to date so we can continue to contact you about your pension and please remember to let us know if any circumstances change. </p><p><a data-sf-ec-immutable=""></a><a href="/login">You can update your details quickly and easily by logging into your myRPS account</a>. </p><p> </p><h2>I’m a IWDC preserved member - what do I need to know?</h2><h4>1. The value of your pension pot can go up or down.</h4><p>As a member of the IWDC Section, you and your employer pay in money into a 'pot' known as your Personal Retirement Account (PRA). The money in your PRA is then invested into the funds or strategies you select, with the aim of helping it to grow over time. </p><p>As a <strong>preserved</strong> IWDC member, you and your employer are no longer paying money into this pot, however, the money you’ve paid in so far, is still invested. This means that the value of your PRA could continue to go up or down depending on how your investments perform. </p><p><a href="https://member.railwayspensions.co.uk/iwdc-members/managing-investments/how-investments-work" data-sf-ec-immutable="">Find out more on the how investments work page.</a></p><h4>2. You decide where your pot is invested.<strong> </strong></h4><p>You can still manage, or change, where your PRA is invested. And you should keep an eye on your investment choices, to make sure they are right for you. </p><p><a href="https://member.railwayspensions.co.uk/iwdc-members/managing-investments/fund-choices" data-sf-ec-immutable="">Read more about your options on the my fund choices page</a></p><h4>3. You can set, or change, your Target Retirement Age (TRA), where applicable<strong> </strong></h4><p>If you choose to invest in a Lifestyle strategy, you should set a Target Retirement Age (TRA). This is the age that you are planning to take your IWDC pot. As you get within 10 years of your TRA, your money will gradually be moved into lower-risk funds to help protect the value of the pension pot you've already built up. You can set or change your TRA by logging in to your myRPS account. Please remember to review your TRA regularly in case your retirement plans change. </p><p><a href="https://member.railwayspensions.co.uk/iwdc-members/managing-investments/target-retirement-age" data-sf-ec-immutable="">Find out more on the My Target Retirement Age page.</a> </p><h4>4. Your loved ones could be taken care of when you die.<strong> </strong></h4><p>If you die while you’re a preserved IWDC member of the RPS, the value of your pension pot will be paid to your beneficiaries at the Trustees’ discretion. </p><p>You can let the Trustees know who you consider your beneficiaries to be by making a nomination or updating your nominations if your circumstances change. </p><p>There is no lump-sum death benefit payable for a preserved member. </p><p><a href="https://member.railwayspensions.co.uk/pension-essentials/nominations" data-sf-ec-immutable="">Find out who you can nominate, and how, on the nominations page</a> </p><h4>5. You can transfer your pension pot, if you want to<strong> </strong></h4><p>If you join a DB Section of the RPS, for example if you move employer, then you may be able to transfer your IWDC pot into your new Section. </p><p>Alternatively, you may be able to transfer your PRA to another scheme, as long as the scheme accepts transfers in and is registered with HMRC. </p><p>You should think this through carefully before making a decision and consider that a transfer may not be in your best interests. You may want – or need – to get advice first.</p><p><a href="https://member.railwayspensions.co.uk/pension-essentials/transferring-my-pension" data-sf-ec-immutable="">Visit the transferring in or out page for more information.</a> </p><h4>6. You decide WHEN to take your PRA. </h4><p>Your Pension Age is the age at which your pension pot is normally paid. Your Pension Age is set by your employer and is usually between 60 and 65. You can find out which Pension Age applies to you by checking your Key Features leaflet. This is available in the My Library area when you log in to your myRPS account. </p><p>Your Target Retirement Age (TRA) is the age you plan to take your IWDC pot. It’s important because your investments will automatically move into lower risk investments 10 years before your TRA if you’ve chosen to invest in a Lifestyle fund. Your chosen TRA could be earlier or later than your Pension Age, if you plan to take your pot at a different time. </p><p>If you are considering taking your IWDC pot before your Pension Age, you may be able to take it from age 55 or 57 depending on when you joined the Scheme, or at age 50 if you have a Protected Pension Age. </p><p>You may have a Protected Pension Age (PPA) if you were an active member of the Scheme on 5 April 2006. This gives you the right to apply for your pension pot from age 50. However, if you opted out of the RPS after that date, you may have lost your PPA and the earliest you can take your PRA is age 55.</p><p>Preserved members must take their pot before age 75.</p><p><a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/when-to-retire" data-sf-ec-immutable="">Find out more on the when to retire page.</a> </p><h4>7. You decide HOW to take your PRA </h4><p>There are 3 main ways to take your pension pot. You can:</p><ol><li>get a flexible income, taking it a bit at a time. This is known as drawdown</li><li>get a regular, secure income, known as an annuity</li><li>take all of the money in your IWDC pot as a cash lump sum. This is known as total encashment </li></ol><p>You can normally take up to 25% (but no more than £268,275) of your pension pot as a tax-free lump sum and then choose one, or a combination of these options for the remaining amount of your pension pot. You do not have to take a tax-free lump sum if you don’t want to. </p><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit"></span><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit"></span><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit">The choice is yours, but there are some restrictions that may apply in certain circumstances. For example, if you take your pot before age 55, you would have to take it as cash. If you wanted to use your PRA for annuity or drawdown, then you would have to transfer it to another provider, however you may not be able to access these options with the new provider until you reach age 55.</span><br></p><p><a href="/iwdc-members/im-planning-to-take-my-iwdc-pot/how-i-can-take-my-iwdc-pot">Read more on the how I can take my IWDC pot page.</a></p><h4>8. Staying up to date today, could help you tomorrow</h4><p>As a preserved member, keeping track of your pension pot, could help you plan for the future and make sure you know what income you might have when you stop work. </p><p>We’ll send you a statement every year, so you can see the current value of your PRA and how it’s invested. </p><p>You can also request an estimate or use the Retirement Modeller in your myRPS account to get an idea of what your pot might be worth when you retire and the ways you could consider taking it. </p><p>It’s important you keep your details up to date so we can continue to contact you about your pension and please remember to let us know if any circumstances change. </p><p><a href="/login">You can update your details quickly and easily by logging into your myRPS account</a>. </p><p> </p>
<p>You’re a preserved member (sometimes known as a deferred member) if:</p><ul><li>You HAVE stopped paying into the Railways Pension Scheme (RPS) </li></ul><p>But</p><ul><li>You HAVE NOT yet started taking your pension or transferred out. </li></ul><p>This means that even though you are no longer putting money into your pension, the benefits you have built up so far, remain in the Scheme until you are ready to take them. That’s why it’s so important that you understand your options and know what being a preserved member means for you. </p><p>Look below for a summary of what you really need to know as a preserved DB or IWDC member in the RPS. </p><p>If you’re not sure whether you’re in the DB or IWDC Sections of the Scheme you can <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">log in to your myRPS account</a> anytime to find out. <a href="https://member.railwayspensions.co.uk/register" data-sf-ec-immutable="">You can also register for an account</a> for free if you haven’t already.</p><p> </p><h2>I’m a Defined Benefit (DB) preserved member – what do I need to know?</h2><h4><strong>1. Your pension will be based on when you stopped paying in</strong></h4><p>The RPS defined benefit Sections are mostly ‘final salary’ schemes. They give you a regular, guaranteed annual income for life, based on your salary and how long you’ve been a member of the scheme. This is, payable from a specified date, however, you may have scope to take it early or late. </p><p>The DB part of the Scheme also includes some Career Average Revalued Earnings (CARE) arrangements where your pension is based on your earnings right across your membership. </p><p>In both cases, as a preserved member, your pension will be based on your final or final average salary, and length of membership at the point you stopped paying in. </p><p>Even though you’re no longer paying in, your preserved pension may still increase, in line with the Scheme rules to protect it against inflation. </p><p><a href="https://member.railwayspensions.co.uk/defined-benefit-members/im-still-working/new-to-the-scheme" data-sf-ec-immutable="">For more general information on how a DB scheme works, visit the I’m new to the Scheme page.</a></p><h4>2. You cannot pay into BRASS, but your previous AVCs remain invested.</h4><p>As a preserved member you can no longer pay into your pension, either in the form of regular contributions, or Additional Voluntary Contributions (AVCs). </p><p>However, any AVCs you have already paid into BRASS or AVC Extra, will remain invested. This means their value can go up or down. </p><p>You should keep an eye on your fund choices to make sure they’re still suitable for you. </p><p>As a preserved member you can still check and change your BRASS or AVC Extra funds at anytime. <a href="https://member.railwayspensions.co.uk/defined-benefit-members/saving-more-BRASS-AVC-Extra/managing-my-BRASS" data-sf-ec-immutable="">You can find out how to do that on the managing my BRASS page.</a> </p><p>You may also be able to transfer the money in your BRASS pot or AVC Extra funds to another arrangement. For more information, check the <a target="_blank" href="https://cdn3.railpen.com/mp-sitefinity-prod/docs/default-source/rayn/guides-for-db-members---active-and-preserved/transfer-options.pdf?sfvrsn=54d41644_13">Read as You Need guide to transfer options for DB members</a>.</p><h4>3. Your loved ones could be taken care of when you die.</h4><p>If you die before taking your pension, a tax-free lump sum could be paid to those you care about. For preserved members, this lump sum is typically the lower of either: </p><ul data-list="1" data-level="1"><li>5 times your yearly basic pension or</li><li>4 times your Pay (this is Final Average Pay for some sections)</li></ul><p>Plus, any BRASS and AVC extra funds.</p><p>You can tell the Trustee who you would like the lump sum to be paid to, by making a nomination when you <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">log in to your myRPS account</a>. You should also remember to update your nominations if/when your circumstances change. The Trustee will take your wishes into consideration, when deciding who should receive the payment.</p><p><a href="https://member.railwayspensions.co.uk/pension-essentials/nominations" data-sf-ec-immutable="">Find out who you can nominate, and how, on the nominations page</a> </p><p>Your dependants, such as your family, may also be eligible to get a pension.</p><h4>4. You may be able to transfer if you want to</h4><p>If you join another Section of the RPS, for example if you change employers, then you may be able to transfer your preserved benefits from your previous section into your new ‘active’ section. </p><p>If you do this within 15 months of leaving your previous section then special terms may apply. </p><p>You may also be able to transfer your benefits to another scheme all together, as long as that scheme accepts transfers in and is registered with HMRC. </p><p>You should think this through carefully before making a decision and consider that a transfer may not be in your best interests. You may want – or need – to get advice first.</p><p><a href="https://member.railwayspensions.co.uk/pension-essentials/transferring-my-pension" data-sf-ec-immutable="">Visit the transferring in or out page for more information.</a></p><h4>5. You decide WHEN to take your pension.</h4><p>Your Normal Retirement Age (NRA) is usually between 60 and 65 years old and will depend on the rules of your RPS section. You can find your NRA by logging into your myRPS account and looking at your ‘membership details’ or in your Member Guide. </p><p><span style="text-decoration: underline">Early retirement </span></p><p>You may be able to start taking your pension before you reach your NRA, with the Trustee’s agreement. This is known as early retirement and is usually allowed for members aged over 55. In some cases, this may be from age 50 if you have a Protected Pension Age (PPA) and have not previously opted-out of the RPS. You can read more about PPA and how it might affect your pension <a href="https://member.railwayspensions.co.uk/defined-benefit-members/Im-planning-to-take-my-pension/when-to-retire" data-sf-ec-immutable="">You can find this on the when to retire page.</a></p><p>If you take your pension before your NRA, your payments will be lower as early retirement factors are applied, which reduces your pension, reflecting the fact that it will be paid for longer. There are different early retirement factors for preserved members, which means the reduction may be greater than taking your pension on leaving service early as an active member. The reduction can be significant, and you can request an estimate by logging into your myRPS account. </p><p><span style="text-decoration: underline">Late retirement </span></p><p>As a preserved member your pension will be paid at your NRA, unless you choose to defer payment. </p><p>Deferring payment is where you opt to take your pension at a later date, which is known as late retirement. </p><p>You would typically need to apply for this between 3 months before, and 3 months after your NRA. And you must start taking your pension before the age of 75. </p><p><a href="https://member.railwayspensions.co.uk/defined-benefit-members/Im-planning-to-take-my-pension/when-to-retire" data-sf-ec-immutable="">You can read more on the when to retire page.</a></p><h4>6. You need to keep your details up to date.</h4><h4><strong></strong></h4><p>As a preserved member, keeping track of your pension could help you plan for the future and make sure you know what income you might have when you stop work. </p><p>We’ll send you a statement every year, so you can see how much your pension might be worth. You can also request an estimate or use the Pension Planner in your myRPS account. </p><p>It’s important you keep your details up to date so we can continue to contact you about your pension and please remember to let us know if any circumstances change. </p><p><a data-sf-ec-immutable=""></a><a href="/login">You can update your details quickly and easily by logging into your myRPS account</a>. </p><p> </p><h2>I’m a IWDC preserved member - what do I need to know?</h2><h4>1. The value of your pension pot can go up or down.</h4><p>As a member of the IWDC Section, you and your employer pay in money into a 'pot' known as your Personal Retirement Account (PRA). The money in your PRA is then invested into the funds or strategies you select, with the aim of helping it to grow over time. </p><p>As a <strong>preserved</strong> IWDC member, you and your employer are no longer paying money into this pot, however, the money you’ve paid in so far, is still invested. This means that the value of your PRA could continue to go up or down depending on how your investments perform. </p><p><a href="https://member.railwayspensions.co.uk/iwdc-members/managing-investments/how-investments-work" data-sf-ec-immutable="">Find out more on the how investments work page.</a></p><h4>2. You decide where your pot is invested.<strong> </strong></h4><p>You can still manage, or change, where your PRA is invested. And you should keep an eye on your investment choices, to make sure they are right for you. </p><p><a href="https://member.railwayspensions.co.uk/iwdc-members/managing-investments/fund-choices" data-sf-ec-immutable="">Read more about your options on the my fund choices page</a></p><h4>3. You can set, or change, your Target Retirement Age (TRA), where applicable<strong> </strong></h4><p>If you choose to invest in a Lifestyle strategy, you should set a Target Retirement Age (TRA). This is the age that you are planning to take your IWDC pot. As you get within 10 years of your TRA, your money will gradually be moved into lower-risk funds to help protect the value of the pension pot you've already built up. You can set or change your TRA by logging in to your myRPS account. Please remember to review your TRA regularly in case your retirement plans change. </p><p><a href="https://member.railwayspensions.co.uk/iwdc-members/managing-investments/target-retirement-age" data-sf-ec-immutable="">Find out more on the My Target Retirement Age page.</a> </p><h4>4. Your loved ones could be taken care of when you die.<strong> </strong></h4><p>If you die while you’re a preserved IWDC member of the RPS, the value of your pension pot will be paid to your beneficiaries at the Trustees’ discretion. </p><p>You can let the Trustees know who you consider your beneficiaries to be by making a nomination or updating your nominations if your circumstances change. </p><p>There is no lump-sum death benefit payable for a preserved member. </p><p><a href="https://member.railwayspensions.co.uk/pension-essentials/nominations" data-sf-ec-immutable="">Find out who you can nominate, and how, on the nominations page</a> </p><h4>5. You can transfer your pension pot, if you want to<strong> </strong></h4><p>If you join a DB Section of the RPS, for example if you move employer, then you may be able to transfer your IWDC pot into your new Section. </p><p>Alternatively, you may be able to transfer your PRA to another scheme, as long as the scheme accepts transfers in and is registered with HMRC. </p><p>You should think this through carefully before making a decision and consider that a transfer may not be in your best interests. You may want – or need – to get advice first.</p><p><a href="https://member.railwayspensions.co.uk/pension-essentials/transferring-my-pension" data-sf-ec-immutable="">Visit the transferring in or out page for more information.</a> </p><h4>6. You decide WHEN to take your PRA. </h4><p>Your Pension Age is the age at which your pension pot is normally paid. Your Pension Age is set by your employer and is usually between 60 and 65. You can find out which Pension Age applies to you by checking your Key Features leaflet. This is available in the My Library area when you log in to your myRPS account. </p><p>Your Target Retirement Age (TRA) is the age you plan to take your IWDC pot. It’s important because your investments will automatically move into lower risk investments 10 years before your TRA if you’ve chosen to invest in a Lifestyle fund. Your chosen TRA could be earlier or later than your Pension Age, if you plan to take your pot at a different time. </p><p>If you are considering taking your IWDC pot before your Pension Age, you may be able to take it from age 55 or 57 depending on when you joined the Scheme, or at age 50 if you have a Protected Pension Age. </p><p>You may have a Protected Pension Age (PPA) if you were an active member of the Scheme on 5 April 2006. This gives you the right to apply for your pension pot from age 50. However, if you opted out of the RPS after that date, you may have lost your PPA and the earliest you can take your PRA is age 55.</p><p>Preserved members must take their pot before age 75.</p><p><a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/when-to-retire" data-sf-ec-immutable="">Find out more on the when to retire page.</a> </p><h4>7. You decide HOW to take your PRA </h4><p>There are 3 main ways to take your pension pot. You can:</p><ol><li>get a flexible income, taking it a bit at a time. This is known as drawdown</li><li>get a regular, secure income, known as an annuity</li><li>take all of the money in your IWDC pot as a cash lump sum. This is known as total encashment </li></ol><p>You can normally take up to 25% (but no more than £268,275) of your pension pot as a tax-free lump sum and then choose one, or a combination of these options for the remaining amount of your pension pot. You do not have to take a tax-free lump sum if you don’t want to. </p><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit"></span><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit"></span><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit">The choice is yours, but there are some restrictions that may apply in certain circumstances. For example, if you take your pot before age 55, you would have to take it as cash. If you wanted to use your PRA for annuity or drawdown, then you would have to transfer it to another provider, however you may not be able to access these options with the new provider until you reach age 55.</span><br></p><p><a href="/iwdc-members/im-planning-to-take-my-iwdc-pot/how-i-can-take-my-iwdc-pot">Read more on the how I can take my IWDC pot page.</a></p><h4>8. Staying up to date today, could help you tomorrow</h4><p>As a preserved member, keeping track of your pension pot, could help you plan for the future and make sure you know what income you might have when you stop work. </p><p>We’ll send you a statement every year, so you can see the current value of your PRA and how it’s invested. </p><p>You can also request an estimate or use the Retirement Modeller in your myRPS account to get an idea of what your pot might be worth when you retire and the ways you could consider taking it. </p><p>It’s important you keep your details up to date so we can continue to contact you about your pension and please remember to let us know if any circumstances change. </p><p><a href="/login">You can update your details quickly and easily by logging into your myRPS account</a>. </p><p> </p>
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Are you a preserved member?
If you’ve stopped paying into the RPS but haven’t taken your pension, then you’re a preserved member. Here's a few things to consider…
You’re a preserved member (sometimes known as a deferred member) if:
- You HAVE stopped paying into the Railways Pension Scheme (RPS)
But
- You HAVE NOT yet started taking your pension or transferred out.
This means that even though you are no longer putting money into your pension, the benefits you have built up so far, remain in the Scheme until you are ready to take them. That’s why it’s so important that you understand your options and know what being a preserved member means for you.
Look below for a summary of what you really need to know as a preserved DB or IWDC member in the RPS.
If you’re not sure whether you’re in the DB or IWDC Sections of the Scheme you can log in to your myRPS account anytime to find out. You can also register for an account for free if you haven’t already.
I’m a Defined Benefit (DB) preserved member – what do I need to know?
1. Your pension will be based on when you stopped paying in
The RPS defined benefit Sections are mostly ‘final salary’ schemes. They give you a regular, guaranteed annual income for life, based on your salary and how long you’ve been a member of the scheme. This is, payable from a specified date, however, you may have scope to take it early or late.
The DB part of the Scheme also includes some Career Average Revalued Earnings (CARE) arrangements where your pension is based on your earnings right across your membership.
In both cases, as a preserved member, your pension will be based on your final or final average salary, and length of membership at the point you stopped paying in.
Even though you’re no longer paying in, your preserved pension may still increase, in line with the Scheme rules to protect it against inflation.
For more general information on how a DB scheme works, visit the I’m new to the Scheme page.
2. You cannot pay into BRASS, but your previous AVCs remain invested.
As a preserved member you can no longer pay into your pension, either in the form of regular contributions, or Additional Voluntary Contributions (AVCs).
However, any AVCs you have already paid into BRASS or AVC Extra, will remain invested. This means their value can go up or down.
You should keep an eye on your fund choices to make sure they’re still suitable for you.
As a preserved member you can still check and change your BRASS or AVC Extra funds at anytime. You can find out how to do that on the managing my BRASS page.
You may also be able to transfer the money in your BRASS pot or AVC Extra funds to another arrangement. For more information, check the Read as You Need guide to transfer options for DB members.
3. Your loved ones could be taken care of when you die.
If you die before taking your pension, a tax-free lump sum could be paid to those you care about. For preserved members, this lump sum is typically the lower of either:
- 5 times your yearly basic pension or
- 4 times your Pay (this is Final Average Pay for some sections)
Plus, any BRASS and AVC extra funds.
You can tell the Trustee who you would like the lump sum to be paid to, by making a nomination when you log in to your myRPS account. You should also remember to update your nominations if/when your circumstances change. The Trustee will take your wishes into consideration, when deciding who should receive the payment.
Find out who you can nominate, and how, on the nominations page
Your dependants, such as your family, may also be eligible to get a pension.
4. You may be able to transfer if you want to
If you join another Section of the RPS, for example if you change employers, then you may be able to transfer your preserved benefits from your previous section into your new ‘active’ section.
If you do this within 15 months of leaving your previous section then special terms may apply.
You may also be able to transfer your benefits to another scheme all together, as long as that scheme accepts transfers in and is registered with HMRC.
You should think this through carefully before making a decision and consider that a transfer may not be in your best interests. You may want – or need – to get advice first.
Visit the transferring in or out page for more information.
5. You decide WHEN to take your pension.
Your Normal Retirement Age (NRA) is usually between 60 and 65 years old and will depend on the rules of your RPS section. You can find your NRA by logging into your myRPS account and looking at your ‘membership details’ or in your Member Guide.
Early retirement
You may be able to start taking your pension before you reach your NRA, with the Trustee’s agreement. This is known as early retirement and is usually allowed for members aged over 55. In some cases, this may be from age 50 if you have a Protected Pension Age (PPA) and have not previously opted-out of the RPS. You can read more about PPA and how it might affect your pension You can find this on the when to retire page.
If you take your pension before your NRA, your payments will be lower as early retirement factors are applied, which reduces your pension, reflecting the fact that it will be paid for longer. There are different early retirement factors for preserved members, which means the reduction may be greater than taking your pension on leaving service early as an active member. The reduction can be significant, and you can request an estimate by logging into your myRPS account.
Late retirement
As a preserved member your pension will be paid at your NRA, unless you choose to defer payment.
Deferring payment is where you opt to take your pension at a later date, which is known as late retirement.
You would typically need to apply for this between 3 months before, and 3 months after your NRA. And you must start taking your pension before the age of 75.
You can read more on the when to retire page.
6. You need to keep your details up to date.
As a preserved member, keeping track of your pension could help you plan for the future and make sure you know what income you might have when you stop work.
We’ll send you a statement every year, so you can see how much your pension might be worth. You can also request an estimate or use the Pension Planner in your myRPS account.
It’s important you keep your details up to date so we can continue to contact you about your pension and please remember to let us know if any circumstances change.
You can update your details quickly and easily by logging into your myRPS account.
I’m a IWDC preserved member - what do I need to know?
1. The value of your pension pot can go up or down.
As a member of the IWDC Section, you and your employer pay in money into a 'pot' known as your Personal Retirement Account (PRA). The money in your PRA is then invested into the funds or strategies you select, with the aim of helping it to grow over time.
As a preserved IWDC member, you and your employer are no longer paying money into this pot, however, the money you’ve paid in so far, is still invested. This means that the value of your PRA could continue to go up or down depending on how your investments perform.
Find out more on the how investments work page.
2. You decide where your pot is invested.
You can still manage, or change, where your PRA is invested. And you should keep an eye on your investment choices, to make sure they are right for you.
Read more about your options on the my fund choices page
3. You can set, or change, your Target Retirement Age (TRA), where applicable
If you choose to invest in a Lifestyle strategy, you should set a Target Retirement Age (TRA). This is the age that you are planning to take your IWDC pot. As you get within 10 years of your TRA, your money will gradually be moved into lower-risk funds to help protect the value of the pension pot you've already built up. You can set or change your TRA by logging in to your myRPS account. Please remember to review your TRA regularly in case your retirement plans change.
Find out more on the My Target Retirement Age page.
4. Your loved ones could be taken care of when you die.
If you die while you’re a preserved IWDC member of the RPS, the value of your pension pot will be paid to your beneficiaries at the Trustees’ discretion.
You can let the Trustees know who you consider your beneficiaries to be by making a nomination or updating your nominations if your circumstances change.
There is no lump-sum death benefit payable for a preserved member.
Find out who you can nominate, and how, on the nominations page
5. You can transfer your pension pot, if you want to
If you join a DB Section of the RPS, for example if you move employer, then you may be able to transfer your IWDC pot into your new Section.
Alternatively, you may be able to transfer your PRA to another scheme, as long as the scheme accepts transfers in and is registered with HMRC.
You should think this through carefully before making a decision and consider that a transfer may not be in your best interests. You may want – or need – to get advice first.
Visit the transferring in or out page for more information.
6. You decide WHEN to take your PRA.
Your Pension Age is the age at which your pension pot is normally paid. Your Pension Age is set by your employer and is usually between 60 and 65. You can find out which Pension Age applies to you by checking your Key Features leaflet. This is available in the My Library area when you log in to your myRPS account.
Your Target Retirement Age (TRA) is the age you plan to take your IWDC pot. It’s important because your investments will automatically move into lower risk investments 10 years before your TRA if you’ve chosen to invest in a Lifestyle fund. Your chosen TRA could be earlier or later than your Pension Age, if you plan to take your pot at a different time.
If you are considering taking your IWDC pot before your Pension Age, you may be able to take it from age 55 or 57 depending on when you joined the Scheme, or at age 50 if you have a Protected Pension Age.
You may have a Protected Pension Age (PPA) if you were an active member of the Scheme on 5 April 2006. This gives you the right to apply for your pension pot from age 50. However, if you opted out of the RPS after that date, you may have lost your PPA and the earliest you can take your PRA is age 55.
Preserved members must take their pot before age 75.
Find out more on the when to retire page.
7. You decide HOW to take your PRA
There are 3 main ways to take your pension pot. You can:
- get a flexible income, taking it a bit at a time. This is known as drawdown
- get a regular, secure income, known as an annuity
- take all of the money in your IWDC pot as a cash lump sum. This is known as total encashment
You can normally take up to 25% (but no more than £268,275) of your pension pot as a tax-free lump sum and then choose one, or a combination of these options for the remaining amount of your pension pot. You do not have to take a tax-free lump sum if you don’t want to.
The choice is yours, but there are some restrictions that may apply in certain circumstances. For example, if you take your pot before age 55, you would have to take it as cash. If you wanted to use your PRA for annuity or drawdown, then you would have to transfer it to another provider, however you may not be able to access these options with the new provider until you reach age 55.
Read more on the how I can take my IWDC pot page.
8. Staying up to date today, could help you tomorrow
As a preserved member, keeping track of your pension pot, could help you plan for the future and make sure you know what income you might have when you stop work.
We’ll send you a statement every year, so you can see the current value of your PRA and how it’s invested.
You can also request an estimate or use the Retirement Modeller in your myRPS account to get an idea of what your pot might be worth when you retire and the ways you could consider taking it.
It’s important you keep your details up to date so we can continue to contact you about your pension and please remember to let us know if any circumstances change.
You can update your details quickly and easily by logging into your myRPS account.
