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<p>If you are in a defined contribution (DC) arrangement, such as BRASS, AVC Extra or the IWDC Section, you can decide how the money you pay into these arrangements is invested. If you don’t want to choose investment funds, you will be invested in a default arrangement.</p><p>There are a range of investments for you to choose from. How these different investments perform, determines how much money is in your pension pot and whether its value goes up, or down. </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; white-space: inherit; word-spacing: normal; caret-color: auto">The first choice you need to make is how hands-on you want to be.</span><br></p><p>Do you want to:</p><ul><li>have your investment choices managed for you? We call this a <strong>Lifestyle</strong> strategy </li><li>make all of the investment decisions yourself, choosing from the range of investment funds on offer?</li><li>or a mix of both?</li></ul><p>If you can’t decide, you will automatically be invested in a Lifestyle strategy by default.</p><p>If you’re a defined benefit (DB) member, this information 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. </p><h3><strong style="background-color: rgba(0, 0, 0, 0); color: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">You can have your investments managed for you with a Lifestyle strategy</strong><br><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"></span></h3><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">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’.</span><br><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"></span></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; white-space: inherit; word-spacing: normal; caret-color: auto">We call this ‘hands-off’ because there are fewer decisions for you to make at the outset. However, it’s still really important that you take an active interest in your investment choices and review them regularly. No investment is 100% safe and the appropriateness of the strategy you choose may change depending on your circumstances or world events.</span><br><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"></span></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; white-space: inherit; word-spacing: normal; caret-color: auto">Lifestyle strategies build your pension savings while you’re still working. All investments have risk, and the lifestyle strategies have been designed with risk and return expectations that reference many members’ retirement plans – for example, some members want to take all of their pension pot as cash at once; while others might want to keep some or all of their pot invested and only take smaller lumps of cash when it’s right for them.</span><br><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"></span></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; white-space: inherit; word-spacing: normal; caret-color: auto">There are 3 Lifestyle strategies offered by the RPS:</span><br></p><ul><li><strong>Annuity Purchase Lifestyle strategy</strong> – this is typically selected by members who want to convert their pension pot to a fixed-interest regular payment (an annuity) when they take their benefits.</li><li><strong>Flexible Drawdown Lifestyle strategy</strong> – this is typically selected by members who want to invest their pension pot post retirement and gradually draw down their pension pot as cash in the future and may leave some of the pot invested.</li><li><strong>Full Cash Withdrawal Lifestyle strategy</strong> – this is typically selected by members who want to take their pension pot as cash in one lump sum.<br></li></ul><p>You choose which of these 3 strategies you prefer. <br></p><p>Based on your chosen strategy, the money you pay into your pension will then be invested on your behalf by the Trustee.&nbsp; <br></p><p>In order to protect your pension pot, these investments move automatically as you get closer to your ‘target retirement age.’ Exactly how that happens depends on the Lifestyle strategy you have chosen. You can read more below, or in our <a href="/defined-benefit-members/saving-more-BRASS-AVC-Extra/brass-fund-choices">fund factsheets</a>. <br></p><p>While much of the work within a Lifestyle strategy happens automatically, there is still a lot for you to think about, not least:</p><ul><li>how you might want to use your DC pension pot when you retire. This could be as a one-off lump sum, as flexible payments though drawdown, or as fixed payments in an annuity. If you’re a DB member this will only apply to your funds in BRASS or AVC Extra, and not to your defined benefit pension overall. </li><li>how much risk you are prepared to take</li><li>Any changes you do make to your TRA will affect your investments including the size of your pot and the risk profile of your investment.<br></li></ul><p>The 3 Lifestyle strategies offered by the RPS are designed to meet these preferences as much as possible. But remember, the Trustee invests your pension contributions in accordance with the strategy you’ve chosen so it’s vital you keep track of your pension pot to make sure your investment choices remain appropriate. <br></p><h3><strong>How a Lifestyle strategy works </strong><br></h3><p>Individual investments which are grouped together are called a fund. <br></p><p>Each of the 3 Lifestyle strategies offered by the RPS is made up of 3 separate funds:</p><ul><li>Long Term Growth Fund</li><li>Corporate Bond Fund </li><li>UK Government Fixed Interest Bond Fund<br></li></ul><p>Each of these funds has a different level of risk.&nbsp; <br></p><p>How your pension pot is split between the funds depends on the Lifestyle strategy you have chosen (by selection or by taking the default investment strategy) and when you are planning to take your benefits. This is known as your Target Retirement Age (TRA). &nbsp;<br></p><p>Your investment allocation is reviewed and aligned to your chosen Lifestyle strategy (depending on your age), around 4 times a year. You don’t have to do anything, because all of this happens automatically. If you are taking your benefits, we will not exclude you from this exercise unless you have returned all required documentation to initiate your benefit request. <br></p><p>Around 10 years before your TRA, your money will start to move from high-risk funds – with potentially higher growth and higher losses – to less risky ones. &nbsp;Of course the risk of any strategy also needs to be considered in the context of your retirement plans. This is shown in the illustration below. </p><img src="https://cdn3.railpen.com/mp-sitefinity-prod/images/default-source/old-site-images/infographics/investment-de-risking-graph.jpg?sfvrsn=d215e7cb_1" alt="Graph showing how investments in a Lifestyle strategy move from adventurous or higher risk funds to more cautious or lower risk funds as you approach your target retirement age (TRA)"><p><br></p><p>Exactly how much remains invested in the higher-risk funds, depends on which Lifestyle strategy you have chosen. </p><p>While the risk classification of each investment fund has been carefully considered, it is external economic factors that will ultimately determine the extent to which your investment goes up or down. <br></p><p>You can find more information about Lifestyle strategies in our <a href="" data-sf-ec-immutable="" data-sf-marked="">fund factsheets</a><br></p><h3><strong>You can manage your investments yourself, choosing from a range of funds </strong><br></h3><p>If you feel comfortable looking after your investments and want to be more hands-on, you can manage your investments by yourself. <br></p><p>You decide:</p><ul><li>which funds to invest in, based on a defined list. </li><li>how much of your pot you want to invest in each fund.<br></li></ul><p>There are 7 funds to choose from:</p><ul><li>Corporate Bond Fund&nbsp; <br></li><li>Deposit Fund </li><li>Global Equity Fund</li><li>Long-Term Growth Fund&nbsp; &nbsp;</li><li>Socially Responsible Equity Fund&nbsp;</li><li>UK Government Fixed-Interest Bond Fund</li><li>UK Government Index-Linked Bond Fund<br></li></ul><p>Each fund has a different objective and risk rating, so you can choose the one that’s right for you. For example, the lowest risk rated fund is the Deposit Fund but there are a range of medium and high risk funds too. Please check your lifestyle or self-selected investment options to ensure the risk rating meets your appetite. <br></p><p>Alongside these 7 funds, you can also invest in any of the 3 Lifestyle strategies mentioned above.<br></p><p>You can find out about the investment funds, including their risk ratings, in the <a href="/defined-benefit-members/saving-more-BRASS-AVC-Extra/brass-fund-choices">fund factsheets</a>.<br></p><p>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. That means it’s up to you to decide if, and when that’s necessary, and to make the investment fund switch yourself. <br></p><p><strong>You can change your investment choices at any time </strong><br></p><p>To change the strategies or funds you’re invested in now, or where you want to invest in the future, <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">log into your myRPS account</a>. Then, go to the 'My pension' section and 'Funds' page.<br></p><p>If you're in a Lifestyle strategy you can also check, and change, your Target Retirement Age (TRA) in your myRPS account. <br></p><p>Any changes you do make to your TRA may affect your investments including the allocation of your pot between investment funds and the risk profile of your investment. <br></p><p>Make sure you have read all of the information available on the website and try out the Pension Planner (DB members) or Retirement Modeller (DC members) to help you understand the consequences before you act. <br></p><p><strong>You can get help deciding what’s right for you </strong><br></p><p>You can find more information about your investment options on the <a href="/iwdc-members/managing-investments/fund-choices">my investment choices page</a>.<br></p><p>If you need more support, you can also get financial advice. <br></p><p>Our advice partner Liverpool Victoria (LV) offers members financial advice at a discounted rate. You can contact LV on 0800 023 4187. You can also find Independent Financial Advisers in your local area at Unbiased.co.uk.&nbsp;<span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"></span></p>

<p>You and your employer both pay money into your pension while you’re an active member of the Railways Pension Scheme (RPS). That money is then invested for your future, and can have an impact on the world around you too.&nbsp;</p><p>Railpen is the company responsible for investments </p><p>While<a href="/knowledge-hub/the-trustee"> the Truste</a>e has overall responsibility for the Scheme and your money, they entrust a company called <a href="https://www.railpen.com/" target="_blank" data-sf-ec-immutable="">Railpen </a>to look after it and invest your pension contributions on the Scheme’s behalf. </p><p>This in itself won’t have a direct impact on how much you’ll get in retirement. But Railpen are tasked with investing your pension in a way that helps to ensure it can be paid securely, affordably and sustainably. </p><p>Railpen recognises this is a significant responsibility and strives to give members like you the best possible outcomes in retirement, while also having a positive impact on the world you will retire into. </p><h3>Your pension is invested for the long term</h3><p>An 18-year-old who joins the rail industry today may not retire for 40 or so years. By then the world is likely to be a very different place to the one we live in today. </p><p>With this in mind, Railpen takes a long-term and patient approach to investing. This also means it can access investment opportunities on your behalf that aren't always available to other pension schemes.  </p><h3><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: &quot;Open Sans Condensed&quot;, sans-serif; font-size: var(--font-size-h3); font-weight: bold; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit">Your pension is invested in different ways</span></h3><p>Railpen invests primarily in 2 ways. It invests in:</p><ul><li>financial assets</li><li>real assets</li></ul><p>In this context, an asset is something that has the potential to grow in value over time like stocks, bonds and property (we’ll get on to these shortly).</p><h3>Your pension is invested in financial assets</h3><p>Railpen invests in financial assets through both public and private market opportunities. </p><p>Think of the public market as a financial marketplace where companies (that have satisfied set criteria) can raise money by selling stocks to investors. Companies in the public market are also knows as ‘listed companies’ and almost anyone can purchase shares in them. </p><p>By contrast, private market investing (as the name suggests) doesn’t happen on a public exchange. Historically, private markets have been fairly exclusive but they are now much more accessible. </p><p>Public investors can buy and sell at any time, while private investments focus more on the long term.</p><h3>Your pension is also invested in real assets</h3><p>As well as financial assets, like stocks and bonds, your pension money is invested in areas like renewable energy, infrastructure, property investments and development in the UK, and others. These are called real assets.</p><p>These types of investments are fairly relatable because they are something we can see, hear, even touch in our day-to-day lives – like the houses we live in, where we go to work or shop and even solar farms that provide green energy to local communities. &nbsp;</p><p>Investing in real assets provides an opportunity for us to deliver attractive long-term returns for your pension. </p><h3>Railpen considers a range of factors when deciding where to invest your pension</h3><p>Before Railpen decides where to invest your pension, they consider a range of factors. Along with the potential for good returns, this also includes any environmental, social and governance (ESG) factors which present both risks and opportunities. </p><p>Put simply, ESG are a set of standards that are used in the world of investments to measure the following:</p><ul><li>A company’s impact on society</li><li>It’s impact on the environment</li><li>How credible and transparent its working practices are</li></ul><p>Railpen seeks to invest in companies that perform well against ESG factors to help us deliver investment returns for our members. But not only that, Railpen engages with and uses its influence to enhance the value of the money it invests on your behalf. </p><p>They also look for ways to have a positive impact on the communities in which your pension money is invested. This means that ultimately by saving for a pension with the Scheme, you are not only saving for your future, but you are also potentially helping to contribute to a better world, perhaps without even realising it.<br></p><h3>Find out more about where, and how, your pension is invested</h3><p>We’ll be going into more detail about how Railpen invests your pension money in forthcoming blogs, including a more detailed look at Real Assets and the company’s recent investments in Cambridge. </p><p>In the meantime, you can find out more in the investments section of the website and on Railpen’s own website using the links below. </p><ul><li><a href="https://member.railwayspensions.co.uk/knowledge-hub/investments" data-sf-ec-immutable="">RPS website – investments section</a></li><li><a href="https://www.railpen.com/investing/" data-sf-ec-immutable="">Railpen website – investing section</a></li></ul><p>You can also discover more about Railpen’s approach to sustainable investments in <a href="https://www.railpen.com/knowledge-hub/reports/stewardship-report-2023/" data-sf-ec-immutable="">Stewardship Report 2023 at Railpen.com</a>. A shortened version of this report, focussing on the areas members have said is important to them, will be released later this year. <a href="https://cdn-suk-railpencom-live-001.azureedge.net/media/media/34deiw1y/so-member-report-2022_final.pdf" data-sf-ec-immutable="">You can read the 2022 version here</a>.&nbsp;</p><div><div><div id="_com_1"><p>&nbsp;</p></div></div></div>

<h3><strong style="background-color: rgba(0, 0, 0, 0); color: inherit; font-size: var(--font-size-h3); text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit">Our approach to investing</strong></h3><p>The money you pay into the Scheme (plus any returns), is invested into a wide variety of opportunities, companies and brands, which have been carefully selected to generate financial returns in line with the Trustee’s mission to ‘pay members’ pensions securely, affordably and sustainably’.</p><p>Spreading investments in this way helps to deliver better long-term outcomes for our members and gives greater flexibility and resilience against current and future risks.</p><p>This means that along with financial assets, like stocks and bonds, our investments also include more physical opportunities such as renewable energy, infrastructure, property and development in the UK, and others. These are known as <strong>real assets,</strong> and you can learn more about them below. </p><p>You can also read more about our approach to investing using the following links: </p><p><a href="/knowledge-hub/investments/our-approach-to-investing">Web page: Our approach to investing&nbsp;</a></p><p><a href="/knowledge-hub/news-and-views/blog/rps-blog/2024/06/17/your-pension-is-invested-on-your-behalf">Blog post: Your pension is invested on your behalf</a></p><p><br></p><h3><strong>Investing in Real Assets </strong></h3><p>Investing in real assets provides an opportunity for us to deliver attractive long-term returns for your pension.</p><p>Railpen, the Scheme administrator and the organisation responsible for investing members’ money, has a dedicated Real Assets Team. </p><p>They invest in physical assets, which generate positive, long-term returns for our members, such as&nbsp;<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">commercial and residential property and infrastructure, with a particular focus on positive social and environmental investments.</span></p><p>These types of investments are relatable because they are something we can see, hear, even touch in our day-to-day lives – like the houses we live in, where we go to work or shop, and even solar farms that provide green energy to local communities. </p><p>Example investments in this area, include 2 wind farms in Scotland - 1 in South Ayrshire and the other in Argyll and Bute - and 2 biomass investments in Sleaford, England and Port Talbot, Wales, all generating renewable energy to reduce dependence on fossil fuels. </p><p>We have also funded the redevelopment and extension of Monkwearmouth Hospital, an existing mental health facility in Sunderland for the Cumbria, Northumberland, Tyne and Wear NHS Foundation Trust.</p><p>You can read more about our investment in real assets using the following links: </p><p><a href="/knowledge-hub/investments/where-we-invest">Web page: where we invest</a><span style="text-decoration: underline"></span></p><p><a href="https://www.railpen.com/investing/where-we-invest/real-assets/" target="_blank" data-sf-ec-immutable="" data-sf-marked="">Railpen’s real assets page</a></p><p><strong>&nbsp;</strong></p><p><strong></strong><strong></strong></p><h3><strong>Choosing which Real Assets to invest in </strong></h3><p>When making their investment decisions, the Real Assets Team consider a variety of environmental, social and governance factors (ESG). Railpen believe these factors are not only a significant driver of investment outcomes, but also help make a positive contribution to the world our members retire into too. <a href="/knowledge-hub/investments/sustainable-ownership">You can read more about ESG in the Sustainable Ownership section of the member website.</a> </p><p>Alongside its commitment to Sustainable Ownership, Railpen is also a significant investor in something called 'place-based investments’ – investments that seek to secure financial returns for pension scheme members like you, while also seeking to have a positive local impact.</p><p>One such example is in Cambridge, where Railpen has several commercial and retail sites and is currently one of the city’s largest real asset investors. We will be covering Cambridge in greater detail in a separate blog soon, so stay tuned!</p><p>&nbsp;</p>