South Eastern pension scheme

[PaulJ]

Hi all. Does anyone know how the employee pension scheme for SouthEastern works? I am trying to compare my package from my existing employer with that of SouthEastern. What percentage of salary do SouthEastern contribute above stated salary levels and is there the opportunity for matching contributions up to a certain level. For example, my present employer puts 10% of my salary into a pension pot, I then put in 7% and that is matched by my employer.

 

[theironroad]

Most TOC s including SE by looks of their careers page are final salary schemes.

I don't know SE's specific %, but if the employee contribution is 10% then the employer will add 15% as the defined benefit schemes works on a 40/60 split. This is your basic employer pension.

If you want to contribute more to a AVC then many rail employees contribute to BRASS which is the railway AVC. I understand most tocs have stopped any matching contributions into BRASS for new joiners.

 

[PaulJ]

Most TOC s including SE by looks of their careers page are final salary schemes.

I don't know SE's specific %, but if the employee contribution is 10% then the employer will add 15% as the defined benefit schemes works on a 40/60 split. This is your basic employer pension.

If you want to contribute more to a AVC then many rail employees contribute to BRASS which is the railway AVC. I understand most tocs have stopped any matching contributions into BRASS for new joiners.

Thanks for that - very helpful. Would you know if there is a publicly available handbook with the small print?

 

[theironroad]

Search railway pensions and the scheme will come up and there is a lot of info even without logging into an account, but you'd need someone from SE to confirm the actual % as it can differ for every TOC

 

[greatkingrat]

What Southeastern contribute doesn't really matter in this sort of pension, you don't have an individual pension pot as such, instead you have a promise to pay you a guaranteed pension when you retire, based on salary and length of service.

 

[PaulJ]

What Southeastern contribute doesn't really matter in this sort of pension, you don't have an individual pension pot as such, instead you have a promise to pay you a guaranteed pension when you retire, based on salary and length of service.

Ah, thank you. I had to give up my final salary (DB) one 10 years ago in favour of a contributory (DC) variety. I didn’t think final salary pensions were still a thing!

 

[PupCuff]

Ah, thank you. I had to give up my final salary (DB) one 10 years ago in favour of a contributory (DC) variety. I didn’t think final salary pensions were still a thing!

It's worth double checking whether a 'Final Salary' pension exists in this case too - it may not be the case for SouthEastern but a few years ago some (all?) TOCs made changes to the pension scheme to raise the retirement age to 62 vice 60, but also to introduce limits on how much your pensionable pay can rise in one year based on inflation, and introduce 'restructuring premiums' which only count as pensionable from a certain date, thus giving you a lower final, err, final salary. In pretty much all railway cases it is still a Defined Benefit scheme though.

 

[PaulJ]

It's worth double checking whether a 'Final Salary' pension exists in this case too - it may not be the case for SouthEastern but a few years ago some (all?) TOCs made changes to the pension scheme to raise the retirement age to 62 vice 60, but also to introduce limits on how much your pensionable pay can rise in one year based on inflation, and introduce 'restructuring premiums' which only count as pensionable from a certain date, thus giving you a lower final, err, final salary. In pretty much all railway cases it is still a Defined Benefit scheme though.

All valid points which are very appreciated. Silly question - are the final salary schemes contributory or non contributory? Thank you.

 

[theironroad]

All valid points which are very appreciated. Silly question - are the final salary schemes contributory or non contributory? Thank you.

They're contributory, because YOU are contributing to the scheme. Final salary schemes are getting rare and I think network rail make people start in a DC scheme, but tocs are heavily unionised so thats helped.

As pupcuff says, there have been changes with 'normal' retirement age rising from 60 to 62 though can still retire from 55 but with penalties.

In the beginning if you did 40 full years in the scheme your expect a pension of 2/3 of the salary on the day you retire. Restructuring premiums have put an end to that unless all pay rises are below threshold.

Still a good scheme imho though.

 

[PupCuff]

All valid points which are very appreciated. Silly question - are the final salary schemes contributory or non contributory? Thank you.

Contributory. Employee contributions tend to be around 8%, no doubt some higher some lower. If you wish to put more into your pension, you can pay into an Additional Voluntary Contribution scheme called BRASS, where you can pay in additional funds up to a certain threshold based on your pay which can be taken as/as part of your lump sum when you retire. I currently pay £25/week into Brass, though some colleagues choose to throw as much as they can in whilst others prefer to not pay in to BRASS at all to maximise their take home pay.

Restructuring premiums have put an end to that unless all pay rises are below threshold.

Indeed - I couldn't say for certain if it is the same across the different sections within the industry but at our place if you join the company as a train cleaner, but retire as the Managing Director, your pension will still be based, primarily, off the salary you started on, as each promotion (cleaner to team leader, team leader to conductor, conductor to conductor team leader, conductor team leader to area manager, area manager to regional manager etc etc) you will have only had part of the pay rise counted as pensionable pay.