Explanatory note

(This note is not part of the Order)

This Order provides for the establishment of the Railways Pension Scheme (“the Scheme”) and for the designation of that scheme as the “joint industry scheme” for the purposes of Schedule 11 to the Railways Act 1993 (Articles 2 and 3).

The Scheme is a centralised occupational pension scheme for employers which are not associated (as defined in section 590A(3) and (4) of the Income and Corporation Taxes Act 1988). Employers who wish to participate in the Scheme may, in appropriate circumstances, adhere to already existing Sections of the Scheme or may alternatively establish their own Sections. A Participating Employer which establishes its own Section shall adopt the Rules of one of three Arrangements. These are detailed below.

The Pension Trust governing the Scheme is set out in the Schedule to this Order. It contains provisions which apply to the whole of the Scheme including those which relate to:—

(i)

the appointment of Trustees;

(ii)

participation in the Scheme and the establishment of Sections;

(iii)

contribution, investment and contracting–out;

(iv)

amendment of the Scheme and its winding–up (either in whole or in part).

The principal appendices to the Pension Trust contain:—

(i)

The Rules of the 1994 Pensioners “A” and “B” Sections into which assets and liabilities of the BR Pension Scheme in relation to pensioners and deferred pensioners shall be transferred.

(ii)

The Rules of the Arrangements which may be adopted by Participating Employers who wish to establish new Sections of the Scheme. These Rules are of the following types:—

(a)

shared cost;

(b)

defined benefit;

(c)

defined contribution.

(iii)

A Deed by Establishment and Participation which must be entered into by Participating Employers who wish to establish new Sections of the Scheme.

This Order does not impose any new costs on businesses.