Railways Pension Scheme - Saver

matrix999

Hi Guys,

Looking for a little help with something. The railway company I work for has started offering something called RPS Saver.

The leaflet they have provided me with reads as follows:

RPS Saver is an alternative method of paying your Railways Pension Scheme (RPS) contributions which saves you money and increases your take home pay. It takes advantage of current pension, tax and national insurance law to allow you to make this saving and has been approved by HM Revenue and Customs.

Within the leaflet it talks about being automatically enrolled into this scheme.... Now I would have thought it better that employees opt into the scheme themselves should they wish to do so, so it sounds like the company will be making a fast buck here in one way or another for those employees that don't opt out in time????

It then goes on to talk about the benefits of the scheme and states the following "You save the national insurace contributions you would have paid on your RPS Pension Contributions"

Also contained in the leaflet it mentions about a change to terms and conditions of employment if you do not opt out by the 15 August 2008....

I'm no financial guru but there seems to be more holes in this than swiss cheese............:o

Any comments???

Andy_L

Sounds like a salary sacrifice scheme. There's a sticky about them at the top of this forum

"Within the leaflet it talks about being automatically enrolled into this scheme.... Now I would have thought it better that employees opt into the scheme themselves should they wish to do so, so it sounds like the company will be making a fast buck here in one way or another for those employees that don't opt out in time????"

The company save money on employers NI contributions, you save on employees contributions. It's dangerously close to a win-win situation, although some employers adjust the balance of contributions such that you get the same pension contributions & they pocket all the NI savings - doesn't sound like the case here. There can also be issues with the effect of your (headline) salary reducing.

Calchas

Railway Pension Scheme - Saver is another term for what is commonly known as "salary sacrifice".

Have a read of this thread: http://forums.moneysavingexpert.com/showthread.html?t=174519

I agree with you that the default position should be the status quo: in this case opt in to salary sacrificee, rather than having to opt out to stay the same; nevertheless the scheme offered is not as nefarious as some on the railway will have you believe , although of course management benefit as well as the employees.

You should consider it carefully and reading the thread supplied will help.

Good luck in whatever you decide to do.

matrix999

Thanks for your replies,

Going to have a read through the link supplied Calchas.

ticketcollector

My TOC thought of this last year and forced everyone into it.

Your payslips will be slightly different because of it.
I have not seen anything bad because of it.


I am not a pensions expert blah blah.

matrix999

ticketcollector wrote: »

My TOC thought of this last year and forced everyone into it.

Your payslips will be slightly different because of it.
I have not seen anything bad because of it.


I am not a pensions expert blah blah.

I think the main point to consider is the fact that it costs the company nothing to set up and there is savings to be made however the majority of the NI savings are kept by the company and not passed on to the individual.

My TOC states in the leaflet that the money it saves will be used to introduce new staff benefits... Blah Blah Blah!!! Yeah right!! More like an extra lining of money in the fat cats pockets.

Any money the comapny saves should be passed on to the member of staff or put into his or her pension.

Calchas

matrix999 wrote: »

Any money the comapny saves should be passed on to the member of staff or put into his or her pension.

Are your rail pensions defined benefit schemes? If they are, one could make an argument that the money saved by the fat cat company is indeed going into the employees pension.

After all, they have to pay a set amouint of pension no matter what the economic circumstances of the day; hence the flight by more and more companies to money purchase schemes.

matrix999

Calchas wrote: »

Are your rail pensions defined benefit schemes? If they are, one could make an argument that the money saved by the fat cat company is indeed going into the employees pension.

After all, they have to pay a set amouint of pension no matter what the economic circumstances of the day; hence the flight by more and more companies to money purchase schemes.

I think they are defined benefit schemes....I'm sure I read it somewhere!

Within the book detailing the scheme it talked about the employees saving on NI payments and the company would benefit as well from the savings and would be introducing all sorts of wonderfull benefits.....:rotfl: :rotfl: :rotfl:

I'm no financial expert but if there making a saving I would really like to know where the money thats saved is going!

Calchas

If it's going to the shareholders you can get get a piece of that by using your savings from the pension scheme fo join the company sharesave scheme!

:beer: