As a member of CARE the earliest you can draw your CARE pension benefits is age 55.
The Normal Pension Age in CARE is age 65, so if you draw your CARE pension benefits before this date they will be reduced for early payment.
You don’t have to draw your CARE benefits at the age of 55, but you must claim your benefits before the age of 75.
At Network Rail there are three types of retirement:
- retire and leave Network Rail
- retire and remain in employment with Network Rail
- ill-health
Retire and leave Network Rail
If you leave Network Rail and you are over age 55, you can decide to draw your CARE pension benefits.
When drawing your CARE pension benefits you will have the following options:
- take your CARE benefits as an annual pension which is payable for life;
- exchange some of your CARE pension for a tax-free cash lump sum.
Under current tax rules the maximum you can take as a tax-free cash lump sum is 25% of the capital value of your CARE pension benefits (the maximum lump sum you are allowed will be tested against the Lifetime Allowance).
Your CARE pension will be reduced as a result of taking a tax-free cash lump sum.
Additionally, if you have a CARE AVC fund, you could use some or all of your CARE AVCs to provide your lump sum benefit
Retire and remain in employment with Network Rail
If you are aged 55 or over but don’t wish to down tools and fully retire, Network Rail offer you the option of drawing your CARE pension benefits and carry on working with the Company, in your existing role and retaining your current working hours.
This is subject to Company approval, with some supporting information sought from your Line Manager.
If Company approval is granted, you will have the same options as listed in the section above when drawing your CARE pension benefits.
Initiating your retirement
Before you make any decisions, it’s always advisable that you obtain a CARE pension estimate of what you’re likely to receive if you do retire.
You’ll also need to check to see if your CARE pension benefits impact your Annual Allowance and Lifetime Allowance.
You can obtain a CARE pension estimate on your CARE Member Account or by contacting the Network Rail Pensions Team.
Following receipt of your CARE pension estimate, if you do decide to retire you will need to contact the Network Rail Pensions Team in order to initiate your retirement.
To allow enough time to get your CARE pension benefits in place ready for payment, please contact the Network Rail Pensions Team three to six months prior to your intended retirement date.
Please include the following information in your email:
- Network Rail Employee Number;
- Date of retirement / date you wish to draw your CARE benefits;
- whether you are leaving Network Rail or remaining in employment with Network Rail.
If you are intending to retire and remain in employment with Network Rail, Company approval will be sought at this point.
Following confirmation of your retirement date or Company approval being granted, a Retirement Pack, including details of the options available to you and the forms for you to complete, will be sent to your home address.
Payment of your CARE pension benefits
Payment of your CARE pension benefits depends on which option you have elected.
If you have elected to take a tax-free cash lump sum, you will receive your lump sum payment shortly after the pension scheme administrator has received your final CARE contributions.
This may be after your date of retirement depending on Network Rail pay days.
Your regular monthly CARE pension payments will be paid to your nominated bank account shortly after your retirement date and then every four weeks.
The pension scheme administrator will write to you confirming the dates your CARE pension will be paid.
Once in payment, your CARE pension will be increased on the 1st April each year by the applicable Revaluation Percentage or 5%, whichever is lower.
If, for any reason, you need to change the bank account that your CARE pension is paid into, you must contact NetworkRailPensions@wtwco.com at least ten days before your next CARE pension payment is due.
For tax purposes, your CARE annual pension is classed as income and therefore subject to tax but not National Insurance Contributions.
Ill-Health
If you have to stop working because of illness or injury, you may be able to draw your CARE pension benefits before the earliest pension age of 55.
In order to qualify for payment of an Ill-Health pension under the Rules of the CARE pension scheme, an application must be made to the Trustee with supporting medical evidence and information about your current role at Network Rail.
If the Trustee agrees that you meet the criteria that you are no longer able to continue in your current occupation, and will not be able to carry out any other paid employment now or in the future, your CARE pension will be:
- your CARE pension calculation as it would be for early retirement (with no early retirement reductions)
Plus - the CARE pension you would have accrued had you continued as a member of the CARE pension scheme until your Normal Pension Age of 65.
(providing both above conditions do not exceed two times your actual Pensionable Service up to the day before your Ill-Health retirement).
Late Retirement
If you continue working for Network Rail after the Normal Pension Age of 65 you can choose to either continue to pay into CARE up to age 75, or you can choose to stop contributing at age 65 and become a Postponed Pensioner.
If you become a Postponed Pensioner, your CARE pension, when you take it, will be based on the CARE pension you have built up to age 65, but will be increased by a factor determined by the Scheme Actuary to take account of its late payment.
In both cases, you must draw your CARE pension benefits by your 75th birthday.