Frequently Asked Questions
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Active members questions
In order to stop paying into the Scheme, you must opt out. If you opt out, you are no longer covered by death in service benefits, and you will not build up any additional pension during the period you are opted out.
If you do decide to opt out, there may be several options available to you, including transferring your benefits to another registered scheme, leaving them deferred in the Scheme or claiming a refund on your contributions if you’ve been a member for less than two years.
Your guide will explain more about the options available to you.
Your membership provides valuable benefits, the most important of which is a pension for life.
Benefits of membership include:
During your service:
A lump sum if you die while contributing to the Scheme
- Pension benefits for your dependant(s) if you die while contributing
- Options to retire earlier or later than the Scheme’s Normal Retirement Age
- Tax relief on your contributions
- Your employer paying contributions towards your pension
- The ability to proactively increase your pension benefits
- The option to transfer previous pension benefits into the Scheme
- Provision under the Scheme Rules covering early retirement due to ill-health
When you retire:
- A pension for life, plus an additional lump sum
- The option of a higher, tax-free cash lump sum and a reduced pension for life, plus
- A pension for your dependant(s) when you die, and
- Annual increases to your pension
Please complete a Drax Expressed Wishes form to inform the Trustees who you'd like to receive any payments that may be due.
Please send your completed form to:
Railpen
2 Rye Hill Office Park
Birmingham Road
Allesley
Coventry
CV5 9AB
Yes! There are two ways you can pay extra contributions to the Group to add to your benefits:
- buying added years of Group Service
- making additional voluntary contributions known as AVCs to Prudential
The ‘Saving More’ leaflet which gives you more detailed information and guidance.
You can also learn more about this topic in Your guide.
If you have pension benefits from previous providers or employers, you may be able to transfer these into the Scheme if your previous scheme was classed as a UK-registered pension scheme.
This will buy additional back service credits which will be calculated at the date the transfer is received by the Scheme, in accordance with factors provided by the Scheme Actuary.
You can learn more about this topic in Your guide.
You can generally retire early, with Drax’s agreement, from age 55.
Your pension would be calculated in the same way using your pensionable salary and Group service at the date you retire. However, in most cases, your pension amount would then be reduced to allow for its early payment – it depends on the circumstances.
If you leave due to redundancy you may be able to retire from age 50 but this is dependent on your individual circumstances.
You may also be able to retire before the age of 55 due to ill health. Special rules apply if you have to retire due to ill health.
You can learn more about this topic in Your guide.
Railpen
2 Rye Hill Office Park
Birmingham Road
Allesley
Coventry
CV5 9AB
Telephone: 02476 472 895
Email: enquiries@railpen.com
If you are retiring, you will be contacted about a pre-retirement course. Alternatively you can contact either Karen Gallagher or Dawn Tate in the HR Department at Drax.
A court order can be made to transfer part of the value of your benefits as part of the divorce or dissolution proceedings. If this is the case, it would mean your benefits will reduce to provide benefits for your ex-spouse or ex-civil partner. Any order made by the court must be applied to your pension benefits.
Your solicitor or the Courts may request a Cash Equivalent Transfer Value (CETV) in respect of your pension benefits. You can request a CETV by contacting the Administration Team at Railpen.
If you do receive a divorce pension sharing order in relation to your Drax pension benefits this order must be sent to the Administration Team as soon as possible so they can implement the order if valid.
Please send the completed forms to:
Railpen
2 Rye Hill Office Park
Birmingham Road
Allesley
Coventry
CV5 9AB
Deferred members questions
Please complete a Drax Expressed Wishes form to inform the Trustees who you'd like to receive any payments that may be due.
Please send your completed form to:
Railpen
2 Rye Hill Office Park
Birmingham Road
Allesley
Coventry
CV5 9AB
Your pension would be calculated in the same way using your pensionable salary and Group service at the date you leave the company and the Scheme. You will be sent a deferred leaver pack outlining your deferred pension benefits and the future options you may have in relation to your benefits. The deferred leaver pack is normally issued to your home address 4 to 6 weeks after you have left.
Your pension benefits will come into payment when you reach your Normal Retirement Age and the Administration Team will write out to you approximately 4 months before your Normal Retirement Age.
You could elect to retire early from age 55. You must give two month’s notice to retire early. However, in most cases, your pension amount would then be reduced to allow for its early payment – it depends on the circumstances.
If you leave due to redundancy you may be able to retire from age 50 but this is dependent on your individual circumstances.
You could elect to transfer your pension benefits from the Drax Group of the ESPS to an alternative pension provider.
Yes, you have the option to transfer your pension benefits to an alternative pension provider.
Deciding whether this would be the best option for you involves detailed analysis, as DB benefits are generally very valuable. We would recommend that you take professional advice before opting to transfer elsewhere. Indeed, the Government now insists that members with a transfer value involving funds of £30,000 or more must take financial advice from an FCA authorised adviser, and that evidence of this is made available to the transferring scheme prior to the transfer proceeding. If you do not have a financial adviser, the following may be of assistance in appointing one:
Unbiased - 0330 303 0025 or unbiased.co.uk
MoneyHelper - moneyhelper.org.uk
You must understand the benefits you may be giving up by electing to transfer your benefits elsewhere.
You can contact the Administration Team if you wish to request a Cash Equivalent Transfer Value (CETV) in respect of your pension benefits.
It is important that you keep us informed of any change in personal circumstances including change of address and change of marital status.
>To make this easier there are forms you can complete which can be found in the Forms section.
These include the following forms:
Please also ensure your Expressed Wishes form is up to date. This form is very important as it tells the Trustee who you would like to receive any cash benefits that may be payable if you die in service. You can nominate more than one person or organisation (such as a charity or club) and also say how you’d like the sum to be distributed.
Pensioners questions
PAYE tax is deducted from your pension before it is paid in a similar way to the salary you received when you worked for the company.
It is important that your beneficiaries are aware of the pension you receive as there may be benefits due to them in the event of your death.
Generally in the event of your death a pension is paid to your spouse or civil partner. Depending on circumstances benefits may also be payable to other dependents.
If you are within 5 years of your retirement, a cash lump sum is payable, equal to the remaining full pension you would have gone on to receive for the rest of the five-year period. If you are within 5 years of retirement it is therefore important to keep your Expressed Wishes form up to date.
In the event of your death, your family or beneficiaries should contact the Railpen Administration Team:
Railpen
2 Rye Hill Office Park
Birmingham Road
Allesley
Coventry
CV5 9AB
Telephone: 02476 472 895
Email: enquiries@railpen.com
If you change your bank or building society it is important you tell us as soon as possible preferably before you change accounts.
This will enable us to change the account we pay your pension to before the next payroll run. This helps to prevent any delays in paying your pension where it has been paid to a closed account and has bounced back to us.
There is a Change Bank Details form you can use. You can also find this form in the Forms section.
If you are under the State Pension age, your pension will increase by the rise in Retail Prices Index (RPI) up to a maximum of 5%. If you are over State Pension age your Drax pension increases differently.
In your first year of retirement you may find that your pension increase has been pro-rated based on the number of months you have retired before 1st April.
We will write to you before your March pension payment with full details of your increased pension.
