On the go: The Railways Pension Scheme is reviewing its early retirement factors and is advising members considering taking early retirement that they should wait until the review is completed before making their decision.
Early retirement factors apply to lump sum and pension benefits available to members who retire before their normal retirement age. Some RPS members qualify for early retirement once they reach the age of 55, while others can retire at age 50 if they have a protected minimum pension age.
In both cases, benefits are reduced compared with those available after the normal retirement age.
For example, members with benefits earned after July 1 2012 enjoy 100 per cent of those benefits if they retire at age 65, reducing to 75 per cent if they retire at age 60, and 46 per cent if they retire at 50, according to the RPS members’ guide. It noted, however, that factors affecting these figures can change, and members should apply for an individual early retirement estimate to obtain the precise figure.
In some cases, members are able to claim their benefits early and continue working, with the agreement of Network Rail. In these circumstances, early retirement reduction factors are applied on a “cost-neutral” basis.
The proposed new factors, which if passed at review come into effect on July 1, will likewise apply to members retiring early on a cost-neutral basis, and members are encouraged to refer to their member guides to see if they might be effected.
The RPS also suggested that people considering early retirement might want to wait until after the review before finalising their decision, though it stressed that members “are not expected to be worse off” as a result of the changes.
“If you choose to accept an early retirement quote now, based on a date of retirement on or after July 1 2022, then we will ensure that the new factors are applied to your benefits and that you are no worse off,” it said.
Trade unions including the RMT have been critical of perceived attacks on the RPS in recent years, though have signed up to the government’s Rail Industry Recovery Group, which has in its terms of reference a commitment to maintain “a sustainable pension scheme”.
The RMT is currently balloting its members over strike action in response to plans for a £2bn cut in railways spending at Network Rail, which the union contends is an attack on pay, terms and conditions.
It is understood that pension changes are not included in this trade dispute, however.
