BRASS News
We are pleased to tell you that the new BRASS fund choices were made available to members from 30 September 2009. BRASS is the name given to the additional voluntary contribution (AVC) arrangement offered to members by the Trustee of the railways pension schemes. AVC schemes allow you to save more for your retirement and money you save in the BRASS scheme can be used to boost your overall pension benefits.
BRASS Literature
Members who already participate in BRASS will have received a launch pack including a BRASS booklet, new application forms and a BRASS Fund Choices Fact Sheet. Copies of the new application forms and the fund factsheets for each of the BRASS fund choices can be found on this website. You can also phone the helpline on 0800 2 343434 or write to rpmi, PO Box 300, Darlington DL3 6YJ to request copies.
The booklet includes information about the BRASS fund arrangements as well as some things you should consider when deciding which BRASS funds to invest in. Each fund choice aims to give investment return but also involves some level of financial risk (i.e. the potential for your BRASS fund units to fall in value). Some funds have the potential for higher returns but also have more financial risk.
The level of financial risk you take depends on your fund choices. It is important to consider your personal circumstances, intended retirement age, and attitude to financial risk when making fund choices. The Trustee would also suggest that you consider taking independent financial advice to help you make your decision.
Fund Choices
There are five fund choices that were made available to all members from 30 September 2009: the Cautious Fund, Growth Fund, Global Equity Tracker Fund, Bond Fund and the 2009 Pension Deposit Fund.
Cautious Fund
This fund can invest in a broad range of investments including holdings in the pooled funds operated by rpmi on behalf of the Trustee for the railways pension schemes. These funds invest in a variety of asset types including bonds and company shares (equities), and may invest in other assets - for example property. A substantial proportion of the fund will be invested in bonds (or bond-like assets). The objective of the fund is to grow over the long term, although the value of these investments may fall as well as rise. The fund will not aim for as high returns or take as much risk as some other BRASS fund options.
Growth Fund
This fund can invest in a broad range of investments including holdings in the pooled funds operated by rpmi on behalf of the Trustee for the railways pension schemes. These funds invest in a variety of asset types including company shares (equities) and bonds, and may invest in other assets - for example property, fund of hedge funds and commodities. It is expected that a substantial proportion of the fund will be invested in equities. The objective of the fund is to grow over the long term, although the value of these investments may fall as well as rise.
Global Equity Tracker Fund (previously known as the Pension Global Equity Fund)
This fund invests in company shares in equity markets around the world. At present the fund is broadly divided equally between investments in the UK and outside of the UK, but this proportion may vary from time to time. The fund aims to produce good long-term growth in asset value, although the value of these investments may fall as well as rise. This fund has the highest potential return but also takes the highest level of financial risk of the funds currently available through BRASS.
Bond Fund
This fund invests in UK Government bonds. It aims to produce moderate returns with moderate variability in the short term, although the value of these investments may fall as well as rise.
2009 Pension Deposit Fund
This fund invests in short term cash deposits and cash-like instruments and is designed to provide capital security and a modest investment return, although the value of these investments may fall as well as rise.
A feature of the new Growth and Cautious Funds is the introduction of the concept of ‘life-styling’ to the BRASS arrangements. Where life-styling is used, members’ holdings and contributions automatically start switching into funds with less financial risk as their target retirement age (TRA) approaches. Railways Pension Scheme members will have their TRA set to age 60.
If a member does not make a fund choice when they join BRASS, their contributions will automatically be directed to the Cautious Fund with the lifestyle option.
Fund choices are not a ‘once and for all decision’. It is important that you review your fund choices from time to time to check they are still appropriate – especially as you get closer to your retirement.
Closed BRASS Funds
The Pension Deposit Fund was closed to future contributions from 1 May 2009 and was replaced by the 2009 Pension Deposit Fund from that date. The Pension Assured Fund was closed to new contributions from April 2003 and in June 2007 contributions to this fund were stopped altogether.
The Pension Managed Fund was closed to future contributions from 30 September 2009 and members had their future contributions redirected from the Pension Managed Fund to the Growth Fund if they were more than 5 years away from their TRA, and into the Cautious Fund if they were less than 5 years away from their TRA. Existing funds will remain for the time being in the Pension Managed Fund unless we are instructed to move these by the member.
There are also five older funds that members may also be paying to if they joined before 1 September 1996. At the moment these members can still change the amount they contribute to these funds and can switch investments between them. The Trustee will keep this arrangement under review. These funds are:
- Pension Overseas Equity
- Pension Property
- Pension Fixed Interest
- Pension Equity, and
- Pension Index Linked Gilt
In Summary
The BRASS scheme is a way to save more money for your retirement through a range of funds offering different types of investment opportunity. Further information on all the BRASS arrangements is available on this website.