the History of Railway Pension Schemes
Railway companies were some of the earliest employers to arrange pension benefits for their staff as a means of retaining staff. These funds were set up by act of Parliament, run by Directors and officers who formed a committee to operate and set benefits and contributions. Most operated on the basis of providing benefits produced from a combination of members and company contributions.
A pamphlet on Railway Superannuation Funds written by D. Macgregor in 1887 suggested that there were 10 pension schemes in operation at that date. The early funds were generally limited to salaried officers of the companies, not all staff. Macgregor’s pamphlet argues for schemes to be widened to all classes of permanent staff and simplified.
The following railway companies operated pension schemes in the second half of the 19th century (click on the links to learn more about individual funds):
The following companies established schemes early in the twentieth century:
The following pension schemes were established after the amalgamation of railway companies into the ‘big four’ in 1923:
- London, Midland and Scottish (founded 1924)
- Southern (scheme consolidated 1927)
- London and North Eastern (scheme consolidated 1939, although Sir Alexander Kaye Butterworth, general manager of the North Eastern Railway Company, had produced a report in 1923 concerning the amalgamation of the LNER’s constituent company’s pension schemes into one central scheme. This report outlined the problems such an amalgamation would present, due to the variation in both the form and substance of the existing schemes. Several of these schemes were operating with a significant deficit, and Kaye Butterworth argued that joint contributions would need increasing from 5% to at least 7/8% to ensure solvency).
In 1994 the Railway Pension Scheme (a final salary Defined Benefit (DB) scheme) replaced the old British Rail Pension Scheme (BRPS) following the privatisation of British Rail.
Sources of information
D. MacGregor ‘Railway Superannuation Funds: their operation and suggested improvements’ (1887)
Sir Alexander Kaye Butterworth ‘London and North Eastern Railway: Superannuation: Preliminary Report’ (1923)
G. Robertson ‘A History of the Railway Clearing System Superannuation Fund Corporation’.