Leaving the Scheme and opting out
Find out what to do if decide to leave the Scheme or stop working for your current employer and what happens to your pension pot.
How you opt-out depends on whether or not you were auto-enrolled. If you’re not sure whether you were auto-enrolled, please check with your employer to find out. Then read on to learn what to do next.
If your employer auto-enrolled you into the IWDC Section of the Railways Pension Scheme (RPS), you can opt out as follows:
Getting a refund
To get a refund of any money you have already paid in, you must opt out within a month of being auto-enrolled. This is known as the ‘opt-out period’. If you meet the opt-out criteria, then you will get a refund from your employer.
If you leave the IWDC Section after the ‘opt-out period’ then you may not get a refund of the money you’ve paid in so far. Your options will depend on the rules of the IWDC Section and on pension law.
After 3 years, your employer may be required to automatically enrol you back into the Scheme or another suitable pension scheme. This is in line with auto-enrolment law and is designed to give you another chance to start saving for your future.
You should speak to your employer if you need more information. You can also find general details about auto-enrolment on the joining and auto-enrolment page.
When you started your job, your employer may have enrolled you into the IWDC Section as part of your employment contract. This may not have been done under the auto-enrolment law, so the process is different to that detailed above.
How to opt out:
If you want to leave the IWDC Section, and were not auto-enrolled, you need to speak to your employer in order to opt-out. They might ask you to fill out a form or ask you to put your request in writing.
Your employer will then contact the Scheme administrator, Railpen, which will start the process to end your membership.
Options for your pension pot:
Once the process of ending your membership has been started, both Railpen and your employer will contact you directly to explain the options available to you.
Your options will depend on the rules of the IWDC Section and pension law.
When you leave employment, your 'active' membership of the IWDC Section will end automatically because you and your employer will no longer be paying into the Scheme.
What happens to your Personal Retirement Account (PRA) will depend on a number of things, including:
If, in-line with the factors above, you are not entitled to a refund, your Personal Retirement Account (PRA) will instead remain invested in your chosen funds. This means you will be a preserved member.
Alternatively, you may be able to transfer your PRA out of the IWDC Section to another scheme or provider if you wish.
Your options may be slightly different if you’re leaving work because of severance or redundancy.
Your options may also be different if you’re leaving work because of ill-health.
The Scheme offers a range of valuable benefits to members that you may not want to give up. You can read more about these on our benefits of my membership page.
You should also consider whether cutting back on your pension now might mean you won’t have enough income in retirement for the lifestyle you want.
You may want to take financial advice before you make a decision.