Don t miss out! Register now. Want to know more? Already registered? 2017 issue 04. So what are you waiting for?

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1 2017 issue 04 Don t miss out! Register today for myrps. It s your own IWDC pension account. You can see how much your pension is currently worth, check your investments and much more with myrps Registering is free, quick and easy. Plus the benefits of joining are about to get even better, with a host of new tools and features coming soon. So what are you waiting for? Hundreds of IWDC pension scheme members just like you have already registered for a secure account at railwayspensions.co.uk. myrps Put yourself in control of your retirement planning, just like them! Register now You ll need your: n address n National Insurance number n pension reference number (it s on the address slip with this newsletter) Go to railwayspensions.co.uk/register. Fill in the short form. Your address is your username you also need to create a password, and set up a couple of security questions. A unique PIN will be sent to your . Log in for the first time with this PIN, and then change to a more memorable number if you want. Want to know more? Already registered? See pages 2 and 3 to find out more about your upgraded coming later this year. myrps account,

2 page 02 Your upgraded website is You can access your IWDC website on a computer, tablet or smartphone, so it s easy to keep track of your pension whenever and wherever you want. Right now, you can log in and: % check your Personal Retirement Account (your pension pot) coming soon What s new for you online? Later this year, you ll see a new improved dashboard showing all the latest details about your IWDC pension. Plus, important alerts and updates will be sent to your personal inbox, flagging up things you should do. % view your contributions and salary history nominate who may get a lump sum if you die before claiming benefits use our Lifestyle calculator to check how much you ll need for your retirement review and switch your investments You ll be able to manage your: Retirement planning n Get an estimate of your pension benefits at the age you want to retire n Apply for your benefits n Apply to transfer in a pension value from another scheme Life changes n Submit a request for ill-health retirement n Request an estimate of pension benefits after a divorce Tax allowances n Get a Pension Saving Statement showing your contributions during a tax year n Pay a tax charge to HM Revenue & Customs if your pension savings are over the Annual Allowance (depending on certain criteria)

3 page 03 Trustee s message... Welcome to your latest IWDC newsletter. Buying a car or a holiday feels like a welcome reward. You ve worked for it - you deserve it! But paying into a pension can seem like a chore, especially when retirement is a long way off. That s a long-term commitment. It means contributing over a long period of time and perhaps even making your own investment choices. And then there s the biggest question of all when do you actually want to retire? The world of pensions has changed significantly over the past five years: there s much more choice, a lot to think about, and the information is often complex. Pour the volatile political climate into the mix with Brexit and the General Election results still dominating the news and no one can be sure what the future holds. I d like to offer reassurances that I, along with my colleagues on the Trustee Board, am here to support you throughout your pensions journey. Web support and feedback You will also be able to: n ask questions about your IWDC pension n send comments to your pensions administrator RPMI Register now Don t forget to sign up if you haven t already! We care passionately about the Railways Pension Scheme and its members. We keep a close eye on the Scheme to make sure that it is being run efficiently, its assets are protected, and the investment choices available to you are appropriate for your needs. In short, we want to make sure that you get the benefits you deserve, and expect, in years to come. Find out more about the Scheme s overall performance in 2016 in the new Report & Accounts online at railwayspensions.co.uk/reports. John Chilman, Trustee Chairman Helpline telephone number: insight@rpmi.co.uk

4 page 04 Transferring your pension overseas If you transfer your pension to a qualifying recognised overseas pension scheme (QROPS), you may be charged 25% of the value of your pension benefits. This is called the overseas transfer charge. A QROPS is a pension scheme based outside the UK, but is similar to a UK registered pension scheme. The overseas transfer charge applies if you wanted a transfer to a QROPS to go ahead on or after 9 March 2017, but there are some exceptions. The charge does not apply if: n n n n n You re resident in the country where the QROPS was established; or You re resident in a country in the European Economic Area (EEA), and the QROPS was also established in a country within the EEA; or You re an employee of an international organisation and the QROPS was set up by that organisation to provide benefits for, or in respect of, past service of employees; or The QROPS is an overseas public service pension scheme and your employer participates in it; or The QROPS is an occupational pension scheme and your employer is a sponsoring employer of it. If you transfer to a QROPS and your circumstances change in the next five years The overseas transfer charge can be applied (or reclaimed) retrospectively if your circumstances change - in relation to the criteria - within five full tax years of your transfer. Unauthorised payment charges Any transfers to schemes outside the UK which are not registered, or not QROPS, will face a charge of at least 40% because the transfer is deemed to be unauthorised. Other transfers out of the Scheme You have several options if you re thinking about using your IWDC pension pot (see page 7 for details). If, when you retire, you want to use an option not currently available through the Scheme, you can transfer your benefits out. You should get financial advice first. You can ask for a transfer value quote from the Helpline on

5 page 05 Do something valuable for free Nominating won t cost you anything, but it could be worth a lot to those you care about. People or causes close to you could get a lump sum worth up to 4 times your salary (if you die before you start claiming your pension). Check your Key Features guide in myrps to see what your lump sum may be worth. By nominating: n You are letting the Trustee know who you would like to get the lump sum n any lump sum awarded is tax free (because it isn t included in your estate) and How to nominate online... It s easy! So easy, in fact, that hundreds of your colleagues have done it Simply sign in/register for your myrps account at railwayspensions.co.uk. Go to My nominations Tell us your nominations, submit and you re done! Or you can download a Nomination form from the website, complete and return to RPMI. n the decision-making process is speeded up, meaning less stress for your loved ones during a very difficult time. Find the form you need It s easy to manage your Scheme pension online, but you can also download and print off a range of useful forms if you want to. You can find them all at railwayspensions.co.uk/ resources. Check & change your investments Pay more Nominate Helpline telephone number: insight@rpmi.co.uk

6 page 06 Retirement is changing Getting a State Pension used to be the milestone for retirement, but not anymore. There s much more flexibility and choice around claiming your pension benefits. This is mainly because there is a growing focus on private pension planning, but also because of rises in the State Pension age and life expectancy. Reality check By 2020, the State Pension age will rise to 66 for both men and women. More rises are expected after that. The current full State Pension is per week for a single person (around 8,325 per year). How much you actually get depends on your National Insurance record. You could have at least 20 years of retirement to look forward to. So where will your income come from? A typical couple should aim for 26,000 a year around 2,200 per month in today s money for a comfortable retirement. (Source: Which survey, February 2017, based on 1,590 retired couples). Find out how much State Pension you could get and when you can get it at gov.uk/check-state-pension and gov. uk/state-pension-age. What s in your IWDC pension pot? The easiest way to find out the current value of your Personal Retirement Account is in myrps. Sign in or register at railwayspensions.co.uk. You can also check your Annual Benefit Statement, which is mailed out every year. Ask yourself When do you want to retire? You can retire at your Section s Normal Retirement Age, or you can set your own Target Retirement Age (see page 9 for details). Your retirement date can have a big influence on how your funds are invested. Should you pay more in? As a guide, take your age when you started paying into your pension and halve it. This is the percentage of your gross salary that you should think of paying in each year. Check your contribution rate in myrps at railwayspensions.co.uk. Have you thought about AVCs? You can save even more with Additional Voluntary Contributions. The earlier you start, the more chance your benefits will grow in the long term. Learn more at railwayspensions.co.uk.

7 page 07 Don t lose out The money in your Personal Retirement Account is invested in a range of funds. Quick checklist Go to railwayspensions.co.uk to check your account s current value in myrps. myrps You can review and change your fund choices online too. Keep an eye on your Target Retirement Age. dcadmin@rpmi.co.uk to check or change it. Investment risk Higher-risk investment funds may mean higher returns - and also perhaps higher losses. But lower-risk funds are not necessarily the safe option. If your savings don t grow steadily, inflation could seriously affect your spending power in the long run. Remember! Think about investments over the long term. Investment values can go down as well as up. Talk to an independent financial adviser if you need professional advice. Find a list in your area at unbiased.co.uk. Using your Personal Retirement Account Currently, you can take up to 25% of your pension pot as a tax-free lump sum. With the rest of your fund, you can: n Buy an annuity n Withdraw the cash in full (subject to limits) n Take some money out but leave the rest invested. This is called drawdown n Keep it invested to save as income later. Unused funds can be passed on to a beneficiary when you die Or, you don t have to take a tax-free lump sum when you retire. You can take lump sums out of your pension pot instead. Each of these lump sums will be 25% tax free, with the rest taxed as income. Currently, you can buy an annuity or withdraw your pension in full through the Scheme. If you want to use one of the other options when you retire, you may be able to transfer your IWDC fund to another approved pension scheme. Think carefully before you make a decision about your pension. You will be taxed on payments you receive, above the agreed taxfree sums. Pension Wise is a free impartial service to help you understand your options. Visit pensionwise.gov.uk for details. Helpline telephone number: insight@rpmi.co.uk

8 page 08 We re looking after you The Trustee s role is to look after your interests as an IWDC member of the Railways Pension Scheme. We keep a close eye on the Scheme s defined contribution arrangements - including IWDC - to make sure members get good value for money, through efficient management and investments that meet your needs. Here s a brief roundup of our work over the past year. Value for members We re happy to say that your IWDC arrangement represents good value. We re working continually with RPMI to improve the services on offer, and to achieve an excellent rating in the future. Our good value assessment is based on: n investment fund strategy and charges n returns on investments n accurate, timely administration n the services and benefits of Scheme membership n informative, engaging communications n high standards of Scheme governance n comparison with other schemes, where possible Investments We regularly review the investment choices available to you to make sure they still meet your needs. 40% Your choices 100% 60% n 60% of you have chosen the default Lifestyle strategy and your investments are managed for you n 40% have chosen the self-select funds and look after your own investments You may be comfortable with your choices, but it s still a good idea to check them regularly at least once a year. If you are in the Lifestyle strategy, you should keep your Target Retirement Age (TRA) updated because we use it to change how your money is invested as you approach retirement. See page 9 for details. dcadmin@rpmi.co.uk if you d like to check or change your current TRA.

9 page 09 Your charges and costs Member charges were lower for all the investment funds in 2016 than in the previous year. RPMI Railpen (which looks after your investments) is constantly making improvements to try and obtain the best possible returns after fees and transaction costs are taken into account. The fund factsheets at railwayspensions.co.uk show estimated costs for the year ahead. We also checked throughout the year that member contributions and payments are being processed efficiently and quickly. Again, we re happy to report that no errors were found which would affect calculations and payments. In fact, the quality of work was found to be of a very high standard. Our expertise To make sure the Trustee Board has the right level of knowledge and understanding, we all take part in regular training programmes. We also have a committee dedicated to DC matters, who have a greater specialist knowledge than other parts of the Trustee, and can spend time on development in DC law and best practice. You can read the Trustee Chairman s latest governance statement in full at railwayspensions.co.uk. It s under Resources on the Report & Accounts page. Tell us what you think We re very keen to hear your views about the Scheme, your investments and retirement plans, and the parts of your DC pension that you value most. You can contact any of the trustees, get in touch with RPMI at dcadmin@rpmi.co.uk, or press the Feedback button at the side of any page of the website to leave your comments. Your Target Retirement Age matters Your section has a Normal Retirement Age. But you can choose to retire earlier or later. This is called your Target Retirement Age (TRA). You will also have a TRA if your money is invested in a Lifestyle strategy. Your TRA is the driving factor behind the funds you are invested in as you get closer to retirement. Ten years before you retire, your investments start moving automatically from higher risk to lower risk funds, with the aim of locking in the value of your account, rather than growing it. Think! n When did you last check your TRA? n Have your retirement plans changed? n Is your TRA still right for you? Check and change your Target Retirement Age by at dcadmin@rpmi.co.uk Helpline telephone number: insight@rpmi.co.uk

10 page 10 State Pension age review A system of regular reviews of the State Pension age was introduced by the Pensions Act The conclusions of the first of these reviews was expected by 7 May 2017 but delayed as a result of the General Election. There was no government announcement on the conclusions of the State Pension age review before the election. However, a report of the independent review relating to this work was published on 23 March Its recommendations were: Pension news in brief: General Election Following the General Election on 8 June 2017, a new Conservative government has been formed with support from the Democratic Unionist Party (DUP). It is too early to say whether there will be any significant changes to defined contribution pension schemes such as the IWDC Section as a result of the new government. The Conservative Party manifesto indicated that there will be a change to the way state pensions are increased, from a triple-lock approach to a double-lock one. However, the DUP manifesto had included a pledge to retain the triple-lock. This has now been retained as part of the new government agreement. n That the State Pension age should rise to age 68 over a two-year period starting in 2037 and ending in 2039, seven years earlier than the currently legislated step up. n The triple lock should be withdrawn in the next Parliament. n State Pension age should not increase more than one year in any 10-year period, assuming that there are no exceptional changes to the data. n Early access and regional or individual variations in SPA should be rejected on the grounds of complexity, but some new flexibility is recommended in the form of options for partial deferred retirement. We will have to wait and see if the government follows these recommendations. The outcome of the State Pension age review will be reported in a future newsletter and online at railwayspensions.co.uk. In the meantime, it is important to note that any change to State Pension age would not affect when you can take your benefits from the IWDC Section. However, you may wish to take your State Pension benefits and when they will be payable from into your overall retirement plans.

11 page 11 Brexit update The new government is likely to be heavily focused on plans for the UK s withdrawal from the EU. The UK is expected to withdraw from the EU by 29 March 2019, unless an alternative exit date is agreed. The terms of withdrawal from the EU are still unknown, so it is too early to fully assess the impact on UK pensions. The situation may become clearer over the period up to March 2019, so we will keep you updated in a future newsletter and online. As the UK is expected to be a member of the EU until March 2019, at least, existing pension laws which affect the IWDC Section remain in place, whether they are based on EU legislation or not. Once the UK has exited from the EU, the UK government may have the freedom to gradually amend legislation which has been influenced by Europe. However, a significant amount of EU pension-related legislation is written into UK law already so there would need to be both a good reason and an appetite to amend this legislation as changes would cost time and money. So, even once the UK has withdrawn from the EU, there may not be any immediate or significant reduction in legal requirements for UK pension schemes. Therefore, for now, we do not expect the start of the formal process to withdraw from the EU to affect your IWDC Section benefits. Spring Budget 2017 The last Budget under the previous government took place on 8 March This is expected to be the last Spring Budget, as future Budgets will now take place in the autumn. Therefore, a further budget is expected later this year. Neither the Spring Budget nor the Autumn Statement included any significant developments about pensions. The main pensions-related announcement in the Spring Budget was the introduction of a 25% charge for certain transfers of pension transfer values to a qualifying recognised overseas pensions scheme (QROPS). The overseas transfer charge targets those who may have tried to reduce the tax they would pay on their pension benefits by transferring overseas and came into effect for transfer requests from 9 March Read more about this on page 4. Within the Autumn Statement, the government announced its intention to reduce the Money Purchase Annual Allowance (MPAA) from 10,000 to 4,000 with effect from April However, due to the General Election, the reduction in the MPAA has not yet been put in law. The MPAA is the amount you can save each year into a defined contribution pension arrangement before being charged tax, but it only applies if you ve already taken some of your pension savings, using any of the following options: n as a full cash payment (unless your pension pot is worth less than 10,000), n using drawdown (i.e. taking a series of cash lump sums), or n to buy an annuity where the income can be reduced. If you have already taken some pension in one of these ways, you should take account of the potential MPAA reduction when planning your future pension savings. It is possible that the new government could still bring the MPAA reduction into force from 6 April 2017, although a later implementation date could apply. Helpline telephone number: insight@rpmi.co.uk

12 page 12 Cyber-security for your pension Cyber crime is a threat that RPMI takes very seriously, and multiple safeguards are in place to protect your personal details online. The security and privacy of your personal data is of the utmost importance to RPMI, and we hold the one of the most reputable and trusted international standards for information security. RPMI has robust controls procedures in place both physical and electronic to safeguard and secure the information we collect, and we are highly vigilant against potential cyber attacks. For example: n Strict member security checks are in place to stop imposters gaining access to member details. n Our anti-virus software is updated regularly. This scans all our systems to stop anything harmful from trying to get in. n Firewalls protect our networks from malicious attacks. IT security reviews are carried out regularly by independent experts, and we take action where appropriate. The world of cybercrime is constantly evolving. We keep a constant eye on the situation, and our controls are designed to reduce the likelihood of a successful attack. Find out more Read how to spot and report different types of fraud at actionfraud.police.uk. For more details about spotting scams, and what to do if you ve been targeted, visit pensionwise.gov.uk Get in touch Pension queries You can find lots of information in our FAQs at railwayspensions.co.uk/faqs. If you can t find the answer you re looking for online, dcadmin@rpmi.co.uk or telephone the Helpline on Tell us what you think insight@rpmi.co.uk, scan the QR code, left, or type the URL surveymonkey. co.uk/r/iwdc17 into your browser. If you re close to retirement, RPMI works in partnership with financial advice provider LEBC to provide help for IWDC members. Initial consultations are free of charge but a fee is charged for further services. You can contact LEBC by: Freephone: From mobiles and overseas Tel: rpmi@theretirementadviser.com