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A deep-dive into a variety of pension topics to help you understand and learn more about your pension and the Scheme.
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A deep-dive into a variety of pension topics to help you understand and learn more about your pension and the Scheme.
Our blogs will give you information, tips, insights and guidance to help you get to know your pension and support you on your journey to retirement.
I recently joined the Railpen team in a visit to Tralorg Windfarm, experiencing the awesome power of one of our real asset investments in action.
Situated in South Ayrshire, southwest Scotland, Tralorg Windfarm has been operational since 2020. Railpen purchased the site in 2019, investing directly in the UK renewable energy sector on behalf of the railways pension schemes.
As an engineer, I was delighted to have the opportunity to visit, and experience the awesome scale of the turbines’ generative power for myself.
It was great to find out how windy the site was, even though it was calm down in the city!
The power of Tralorg and Railpen
The visit was led by Tralorg’s technical site managers, who explained how they work closely with Railpen’s Investment team to optimise the amount of electricity and cash that we produce through the site.
When it comes to generating cash, real asset investments – that is, investments in things you can see and touch, like property – are an important part of Railpen’s investment strategy. They have a much lower investment risk profile than say shares and bonds, which helps secure our members’ future.
Plus, by supporting UK-based projects like Tralorg Windfarm, Railpen is not only delivering on its mission to secure members’ financial futures, but investing in a brighter, more sustainable environment for them to retire into.
Through this collaboration between Railpen and Tralorg, the windfarm generates (sorry) a predictable income stream, which contributes to the regular payments we make to our pensioner members.
28/9/2022
Author: Editorial
<p>We know that Sustainable Ownership* is a topic that is of interest to many of our members. This is not only because it often happens to be at the forefront of pension talk with issues like climate, fair pay and how workers have been treated by their employers during the pandemic and others, but also because of the direct impact it may have on your pension money. And with it hitting the headlines lately, our <a href="https://www.railpen.com/media/3gelmunf/so-member-report-2021.pdf" data-sf-ec-immutable="" data-sf-marked="" target="_blank">2021 Sustainable Ownership Member Review – “<em>Staying on Track for a Sustainable Future”</em></a> – seems to be coming at the perfect time to provide members with an insight into what we have been doing on Sustainable Ownership over the past year. We hope it also brings you reassurance that your pension money is in good hands and is being managed thoughtfully despite the challenging times we are all facing.</p><p>The document has been written for you based on feedback you gave us in last year’s member survey and roundtables. We heard you, and we hope the 2021 Sustainable Ownership Member Review gives you a better understanding of how and where we are investing your pension money to give you an income in retirement. We also hope it shines a light on how we address the impact of governance and sustainability issues on the world into which you will someday retire. </p><p>We asked Caroline Escott, Senior Investment Manager at Railpen - the investment manager of the railways pension schemes - to share some of the cornerstones of the report and to talk us through some of the main points raised in it.</p><p> </p><p><strong>Caroline, you’ve been heavily involved with the production of the 2021 Sustainable Ownership Member Review. Why should our members give it a read?</strong></p><p>We know many members are interested in how we invest and manage contributions in a way that supports a sustainable future for them, and for all. Although we publish many formal, lengthy documents on our Sustainable Ownership work every year, the Member Review is short, snappy and designed specifically for members – it provides the perfect starting point for anyone wanting to find out more! </p><p><strong> </strong></p><p><strong>You’ve spoken to several of our members before writing the report. What are they mostly interested in when it comes to Sustainable Ownership and their pension?</strong></p><p>As we produce the report purely for members, we were keen to really understand what would be of most use, so we worked with our Member Communications team to survey members and hold some focus groups.</p><p>Members told us in the survey that their top three priorities were fair treatment of workers, climate change and fair pay. When we asked the same question in member roundtables, participants said that good corporate governance – that the companies we invest in are well-managed, with expert leaders who are supported by strong teams and listen to investors – was important.</p><p>As a result, we’ve provided case studies in this year’s Sustainable Ownership Member Review which explain what we’ve done on these topics over the last 12 months and how we’ve had an impact on members’ behalf.</p><p><strong> </strong></p><p><strong>You were also keen to find out what members thought of the way we are currently communicating with them. Was there anything that particularly struck you about the results? How would members like to be told of important updates on Sustainable Ownership? </strong></p><p>Something we had suspected, and which the survey results confirmed, was the high proportion of members (76%) who had never seen any of our Sustainable Ownership reports. We’d like to change that and make sure that those people who want to find out more about our work, are able to do so. </p><p>There was huge support for our suggestion that we send information through via regular email updates. Members also said that they would prefer shorter content that is easily digestible, in plain English and spread throughout the year.</p><p><strong> </strong></p><p><strong>Could you please briefly explain what Railpen has done in 2021/2022 to address members’ top issues?</strong></p><p>As investors, we have a few tools at our disposal to help us influence companies to improve what they do on governance and sustainability. This includes speaking to senior company management privately, making our concerns public – if progress is taking too long – or speaking to governmental policymakers, where we think a change in regulation may help more companies make sustainable decisions. We may also choose to remove companies from our portfolio if we think the risk they pose is too big to manage and no progress is being made.</p><p>This year, we <span style="text-decoration: underline">publicly expressed our view on companies’ approaches to sustainable ownership</span> at nearly 1,700 companies (by voting at their Annual General Meetings), flagging our concerns on one or more issues with nearly 60% of these companies. We are also intensively discussing approaches to <span style="text-decoration: underline">climate change</span> at 41 companies as part of our Net Zero Engagement Plan and have been working with the industry and policymakers to ensure more companies give us necessary information on <span style="text-decoration: underline">how they treat their workers</span> – so that Railpen and others can better hold these firms to account.</p><p>More information on our work and the impact we’ve had on members’ priority issues can be found in the Sustainable Ownership Member Review!</p><p><strong> </strong></p><p><strong>And Caroline, as a member of the Railways Pension Scheme - what is your favourite part of the Sustainable Ownership Member Review and why?</strong></p><p>I’ve got a soft spot for the case studies, where we explain how the context of the issue shapes the nature of the tools we use and – where we haven’t yet had the necessary impact – what we’re going to do instead. </p><p>I also think the glossary is really helpful. We know that some of the language we use will be unfamiliar to some members, so we’ve dedicated two pages to explaining all the key terms: if you’re reading the Member Review and need to double-check what something means, do flip to the end of the report for an explanation!</p><p><strong> </strong></p><p><strong>Looking ahead, what are your key priorities for communications with members on Sustainable Ownership?</strong></p><p>We want to encourage a two-way dialogue with members: we don’t just want to be talking ‘at’ you, we want to hear from you and if you’ve got a pressing question, we want you to feel able to ask it. </p><p>There are a few different things we can do to help build this kind of relationship. The Sustainable Ownership Member Review, which tells the story of what we do and how we’ve achieved impact on members’ behalf, is one part. The member survey – which we will be running again in November this year – is also important as it helps us gain a sense of what, if anything, has changed amongst the membership in terms of priority issues and communication preferences. And we’re hoping that by giving members the kind of regular communications they want, with the option to contact us if they have any thoughts about what they’ve read, we’re stimulating a more regular conversation throughout the year.</p><p><strong>Read the report <a href="https://www.railpen.com/media/3gelmunf/so-member-report-2021.pdf" target="_blank" data-sf-ec-immutable="">here</a>. </strong><br></p><p>*Broadly speaking, Sustainable Ownership is the way Railpen – the investment manager of the railways pension schemes - calls their approach to incorporating sustainability issues, like climate change or executive pay, into the investments Railpen manages on your behalf.</p><p> </p>
Railpen's Sustainable Ownership Member Review 2021, crafted specifically for members, is now available.
17/6/2024
Author: Editorial
<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. </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: "Open Sans Condensed", 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. </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>. </p><div><div><div id="_com_1"><p> </p></div></div></div>
The money in your pension does more for you, and the world, than you might think. Read on to find out more…
12/8/2024
Author: Editorial
<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 </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 <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> </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> </p>
When we talk about investments, you may automatically think of things like stocks and shares, but your pension is invested in something far more tangible too…
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