Network Rail CARE Pension Scheme

1 Network rail care Pension SchemeYour Member s GuideThe bigger picture02 Additional Voluntary Contributionsis thename given to any contributions you pay aboveyour normal employee contributions to the Dateis 1 April each Allowance (AA)is the maximumvalue of benefits you can earn in any year underall your Pension arrangements. This usuallyincreases each tax year (see page 11). care Schemeis the Network rail CAREP ension Memberis a member who leavesthe care Scheme before Normal Pension Age and leaves their Pension deferred in theCARE a person who is married to you,in a civil partnership with you, or in the opinion ofthe Trustee is financially dependent (orinterdependent) on Capis the maximum amount ofPensionable Salary that can be used to calculateyour Pension benefit accrued in each SchemeYear. The earnings cap increases each tax year( 117,600 for 2008/09).Eligible Childis any one of your children whohas not yet reached 18 years old, or is under 23years old, but was in full-time education on their18th birthday and continues to be, or has adisability that means they are unable to earn Allowance (LTA)is the maximumvalue of tax efficient Pension savings you canbuild up during your lifetime as decided by HMRevenue and Customs.

2 This usually increaseseach tax year (see page 11).Normal Pension Ageis age Pensionable Salaryis used if youare absent from work ( on unpaid leave) andis your Pensionable Salary based on your regularpensionable earnings as if you are Salaryis your basic pay plusany London/South East allowance you receive (ifapplicable), but excluding other allowances,bonuses etc, and not exceeding the Serviceis your period ofmembership of the care Scheme for which youhave paid contributions and before you take yourpension. Postponed Pensioneris someone who hasattained Normal Pension Age, ceased to makecontributions to the care Scheme , but has notyet taken their Serviceis your period ofmembership in the care Scheme plusmembership relating to benefits from anyprevious Scheme which you have transferred intothe care Scheme Testis the minimumlevel of benefits the care Scheme must provideto meet the requirements of a Reference Scheme (as defined by the legislation for contracting-outpurposes).

3 Retail Prices Index (RPI)is the officialGovernment index published by the Office forNational Statistics (often referred to as inflation)by which increases to pensions are Yearmeans a period of one yearbeginning on the Anniversary Network rail Pension busterNetwork rail care Pension Scheme (12/09)020405 060708 - 101112 - 1314 - 15161718 - 1920 Jargon busterIntroductionBenefits at a glanceJoiningHow it worksTransferring in previous benefitsOpting-outContributionsYour contributionsCompany contributions Additional Voluntary Contributions (AVCs)Your pensionNormal retirementEarly retirementIll-health retirement - IncapacityIll-health retirement - Total IncapacityLate retirementYour other retirement benefitsCash lump sumPension payment and increasesRevenue rulesDeath benefitsDeath in serviceDeath in retirementDeath whilst a Deferred MemberChanging circumstancesAbsence on family leaveOther absenceWorking part-timeLeaving the SchemeThe State Pension and contracting-outOther informationUseful contactsContents03 IntroductionThe term care stands for Career AverageRevalued Earnings.

4 This means that yourpension, when you take it, will be based on theaverage of your pensionable salary over yourperiod of membership in the care Scheme ,adjusted to take account of price inflation. TheCARE Scheme is an excellent way for you tosave for your retirement, thanks to thecontributions made by Network rail and by you,and the tax relief you receive on is a defined benefit career averagearrangement, which works in the following way: You pay a regular contribution each time youare paid ( four-weekly) into the CARES cheme. This is deducted from your pay beforetax is calculated. For each year you are a contributing member ofthe care Scheme you earn a unit of Pension ,based on your Pensionable Salary received forthat year. Whilst a contributing member, the units ofpension you earn will be increased to keep upwith inflation (RPI). The increases apply aftereach full year that the unit of Pension has beencredited.

5 These increases are applied on theAnniversary Date (1 April). When you take your Pension , this will be madeup of the total of these units of Pension , whichevery year will be increased by any increase inthe RPI subject to a maximum of 5% each care Scheme also provides benefits onretirement through ill-health and there are variousoptions if you leave the care Scheme beforeretirement. In the event of your death, there arealso benefits payable to those who depend onyou basic State Pension due to you is paid inaddition to any benefits from the care Schemeand any Pension benefits you have built up inother arrangements. However, whilst a memberof the care Scheme , you will not build up anybenefits in the State Second Pension (S2P) andyou will pay lower National Insurancecontributions as a you are required to contribute to theCARE Scheme , Network rail pays 60% of theoverall cost of providing assets of the care Scheme are held in trustand are separate from the assets of NetworkRail.

6 The care Scheme is a registered pensionscheme under the Finance Act 2004 and benefitsfrom valuable tax privileges, such as tax relief oncontributions paid into the year as a member you can expect toreceive a Summary Funding Statement and aBenefit Statement; these keep you informedabout the financial position of the care Schemeand how your own benefits are building up. Youmay also request a copy of the latest annualReport and rail care Pension Scheme (12/09)This booklet is your guide to the Network rail CAREP ension Scheme (the care Scheme ). 04 Disclaimer: This booklet provides a summary of the mainfeatures of the Network rail care Pension Scheme anddoes not confer any rights or entitlements to benefits fromthe Scheme . This booklet is intended to be a guide to howthe Scheme works; full details are set out in the Trust Deedand Rules which are the legal documents governing theCARE Scheme .

7 Nothing in this booklet can or will overridethe Trust Deed and Rules of the at a glanceRetirement pensionAn income for life from Normal Pension Age (65), or possiblybefore if you apply for early retirement (from age 55).Tax-free cash sumThe option to take a reduced Pension in exchange for a lump sum payment on retirement. At the time of printing this booklet(November 2008) such payments are regarded as tax-free underHMRC legislation. Ill-health benefitsA Pension if you have to retire early because of serious ill-health(subject to Trustee and Network rail consent).Life assuranceA cash sum, which is tax-free under current legislation, payable toyour nominated beneficiaries if you die whilst still a contributingmember. This is an insured benefit and is subject to anyrestrictions or exclusions imposed by the pensionsPensions for those who depend on you financially should you die ( your surviving spouse, civil partner, or a person who in theopinion of the Trustee was financially dependent orinterdependent on you at date of death).

8 Pension increasesAnnual increases to pensions in efficienciesTax relief is available on your contributions to the rail care Pension Scheme (12/09)06 JoiningWho can join?You may join the care Scheme if you areoffered membership of the care Scheme byNetwork rail and are aged less than 65 yearsold. You must be employed for a regular fixednumber of hours per pay period ( per week orfour-weekly). In some circumstances, you maybe required to undergo a medical examination(with satisfactory results) prior to joining do I join?You will need to complete and submit anapplication form. These are available from thepensions department. See back page for contact details. Your effective date of membership will be the firstday of your next pay period, one month after theTrustee has received your completed applicationform and any other information required, or suchearlier date as the Trustee determines.

9 Yourcontributions will start to be deducted from thesame pay period as your effective date it works The care Scheme is a career average revaluedearnings Pension arrangement. This means thatfor each year of membership of the Scheme youearn a unit of Pension for that year based on yourPensionable Salary. Your Pensionable Salary,will, in effect, be divided by 60 (the rate at whichyou earn Pension ) to give the unit of Pension foreach year. These units of Pension will then build,year on year, until the time you take your Pension (retirement), or the date you leave the Scheme if previous benefits into theCARE SchemeSubject to certain criteria, you can transferbenefits from previous Pension arrangementsinto the care Scheme . The care Scheme willnot accept contracted-out Pension benefits. Alltransfers-in will be treated as defined contribution(money purchase) benefits, which means thetransfer value would be invested like AdditionalVoluntary Contributions (AVCs).

10 Opting-OutYou may leave the care Scheme and continueto work for Network rail by giving one month swritten notice. You would only be permitted torejoin the care Scheme with Network rail sconsent. See page 16 Leaving the Scheme forthe options available to you on leaving. You can join from your first day of employment if you: are offered membership by Network rail are under age 65 are employed for a fixed number of hours per pay period complete and return an application form. As a member you will earn a unit of Pension each Scheme Year based on1/60th of your Pensionable Salary for that Scheme Year. If your Pensionable Salary for a particularScheme Year is 15,000, the unit of Pension youearn for this year is 15,000 60 = your Pensionable Salary for another SchemeYear was 18,000, the unit of Pension you earnfor this year is 18,000 60 = you are a contributing member, the unityou earn in each Scheme Year will be increasedby the yearly increase in RPI from the secondAnniversary Date following the Scheme Year inwhich you earned the unit of contributionsYou are required to contribute to the Scheme at apercentage of your Pensionable Salary.