Chairman's Question Time
Do you have a question that you would like answered about the RPS or pensions in general? Our helpline answers questions relating to your specific benefits; if, however, you have a more general question about the RPS, or there is something you would like explained, you can ask your Trustee Board Chairman Derek Scott.
Derek has a wealth of pensions knowledge and expertise gained as a trustee and over a long business career. We must make clear that Derek cannot provide you with advice - we always recommend you consult an independent financial adviser for that – but he is happy to answer any questions relating to the scheme or pensions more generally.
Please email any questions to the editor of Review robin.lee@rpmi.co.uk or write to Robin Lee, Editor Review, Room 39, Stooperdale Offices, Brinkburn Road, Darlington, DL3 6EH.
Please mark your email subject box/envelope ‘Chairman’s question time’.
Questions from Paul Foulger:
1. Which company runs the current available funds, 2009 Pension Deposit Fund, Pension Managed Fund and Pension Global Equity Fund?
2. Who are the managers of these 3 funds and where can I find further information on them regarding their qualifications, past performance and current ratings as fund managers?
3. Where can I find detailed information on each fund, the holdings within each fund and the daily price movement of each fund?
Answers from Derek Scott:
1. All BRASS funds except the Pension Assured Fund are now administered by rpmi. The investment managers are:
- 2009 Pension Deposit Fund - Fidelity International
- Pension Managed Fund - Legal and General Investment Management
- Pension Global Equity Fund - Legal and General Investment Management
2. You can find details of past performance on this website under AVCs, BRASS, Fund Performance. However if you need information specifically on the investment managers’ qualifications and ratings as fund managers I suggest you try the Fidelity Investment Managers' website and the legal & general webiste. See Quick Links - Fidelity and Quick Links Legal & General to visit their websites.
3. This information can also be found on this website under AVCs, BRASS (except the holdings in each fund, which are held by the investment manager).
Question from Rob Binsted
Dear Derek,
I'm an employee of DB Schenker Rail (UK), formerly EWS. Is it true that the railway pension scheme is no longer open to new entrants? Also, if you move to a new job, outside the railway, can you no longer stay a pension scheme member?
Answer from Derek Scott:
While some sections of the Railways Pension Scheme are closed to new entrants, my understanding regarding your own section (based on the latest actuarial valuation report which is dated 31 March 2009) is that it is open to new entrants.
If a section remains open to new members then employees of the designated employer (DB Schenker Rail (UK) Ltd in this example) who are employed in the railway industry may join the scheme, but if these members are not protected (ie were not active members of the BR Pension Scheme when transferred on 1 October 1994) then their pension rights may differ from those who do have protected rights.
The Railways Pension Scheme, as you probably know, is an industry-wide scheme created around the time of UK rail privatisation to provide secure and flexible pension arrangements in what has become a multi-employer industry. It is one of the largest schemes in the UK and today provides pensions for around 180 companies operating within the railway industry. But if you were to move to a new job outside the railway industry, then generally I would not expect your new employer and/or your future service to be eligible, but it is a question you may wish to put to them.
If you do leave railway employment, you will still have a choice between retaining within the Scheme a preserved pension and lump sum payable, usually from age 60 (or earlier if the Trustee agrees), or requesting a transfer value payment payable to another approved pension arrangement sponsored either by a new employer or as part of a personal pension plan.
Questions from Antony Hutton (Signaller Network Rail)
1. We hear almost daily how pension schemes are running scared mainly due to the life expectancy issue. We see the vast majority of colleagues and former colleagues on the railway dying either before 65 years or not a lot older past that age. Surely to be fair and much more accurate, life expectancy of any scheme should be based on that expected and experienced from those who are in it, or worked on the job?
2. With the property markets in a mess and stock markets not much better, one is limited by one’s investment choices especially when hyperinflation could be on the cards. Would it be possible to look at an investment vehicle in Gold for members to take a choice as a defensive stock in these times, please?
Answers from Derek Scott:
1. The Scheme Actuary does take into account Scheme experience (since 1987), so I can assure you he is not using unadjusted life assurance or pensions regulator tables for your scheme. I also think that anecdotal evidence in this area can be misleading. When I started a bus industry scheme in 1987 I quickly noted that a number of members died within five years of retirement, and one of the main trade unions in that industry (TGWU) also provided me with further anecdotal evidence of apparently poor longevity among industrial drivers generally. But this impression was not supported by the Scheme Actuary's analysis of actual experience in the scheme, so I was wrong.
Looking at data I see for the Network Rail section, at the end of June 2009 there were already 370 pensioners in the age bracket 75-79 and ten of the oldest dependants (widows/widowers) are in the age ranges 80-89. The five year age range with the largest number of members was 45-49, and it is expected improvements in life expectancy for younger members which is particularly concerning actuaries and others at this time. But I can assure you we will continue to insist that the Scheme Actuary uses actual section experience to inform his assumptions, not rely on some life assurance or pensions regulator tables which may not be broadly similar to our own experience.
2. Gold has been considered as an investment, but it has not always performed well against other assets and also lacks an income, which is a key feature of the Scheme's main investments in equities (which pay dividends and other distributions), bonds (which pay interest) and properties (which pay rent). Again I can assure you that we will keep this asset class under consideration. We have also recently added a commodities pooled fund to the range of investment options for Network Rail and other sections, although this is unlikely to hold much, if any, gold-related securities.