Under the old State Pension, there was a basic State Pension, based on the number of years of employment, and an earnings-related element (additional State Pension). From 1978 until April 2016 it was possible for employees and employers to contract-out of the additional State Pension (SERPS and, from 6 April 2002, State Second Pension) on condition that the employer provided a pension of, at least, a statutory minimum.<\/p>
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Prior to 1988 contracting-out was restricted to Defined Benefit schemes and there was no individual choice. Until April 2012 it was possible to contract-out by joining a Defined Contribution workplace pension scheme or a personal pension scheme which met certain conditions instead. Contracting-out for salary-related Defined Benefit schemes remained open until 5 April 2016. Contracted-out through a salary-related workplace pension scheme meant that the employee and employer paid lower National Insurance contributions and, in doing so, the employee would receive a lower (or no) additional State Pension. However, they would be receiving a workplace pension instead.<\/p>
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An individual\u2019s basic State Pension is not affected. Separate rules apply if an individual is a member of a salary-related pension scheme before 6 April 1997. These rights, known as the Guaranteed Minimum Pension, cannot be taken before age 65 (men) or 60 (women). Contracting-out finally ended on 6 April 2016, and this means that all employees now pay the same rate of NI.<\/p>
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The specific information requested is not readily available and to provide it would incur disproportionate cost.<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/4142", "label" : {"_value" : "Biography information for Guy Opperman"} } , "answeringMemberConstituency" : {"_value" : "Hexham"} , "answeringMemberPrinted" : {"_value" : "Guy Opperman"} , "dateOfAnswer" : {"_value" : "2019-03-07", "_datatype" : "dateTime"} , "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "questionFirstAnswered" : [{"_value" : "2019-03-07T11:11:00.413Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "29"} , "answeringDeptShortName" : {"_value" : "Work and Pensions"} , "answeringDeptSortName" : {"_value" : "Work and Pensions"} , "date" : {"_value" : "2019-02-27", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "State Retirement Pensions"} , "houseId" : {"_value" : "1"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25259", "prefLabel" : {"_value" : "House of Commons"} } ], "questionText" : "To ask the Secretary of State for Work and Pensions, pursuant to the Answer of 4 July 2018 to Question 160779, how many (a) men and (b) women in private sector pensions schemes were contracted-out between 1978-79 and 1987-88; and how many of those (i) men and (ii) women (A) have reached state retirement age since the introduction of the single tier pension and (B) are still to reach state retirement age.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/4424", "label" : {"_value" : "Biography information for John McNally"} } , "tablingMemberConstituency" : {"_value" : "Falkirk"} , "tablingMemberPrinted" : [{"_value" : "John McNally"} ], "uin" : "226688"} , {"_about" : "http://data.parliament.uk/resources/934702", "AnsweringBody" : [{"_value" : "Department for Work and Pensions"} ], "answer" : {"_about" : "http://data.parliament.uk/resources/934702/answer", "answerText" : {"_value" : "
The impact of recent pension reforms on people who were contracted out of the additional pension system (and therefore have an entitlement to a guaranteed minimum pension as part of their private pension provision) is dependent on personal circumstances, and there are a multitude of scenarios which can result in a range of different outcomes, both positive and negative. It is not, therefore, practical for government to give general advice to this group; and nor is it an effective use of resources to issue personalised advice to everyone in this situation. The best way for someone who is has been contracted out to find out their state pension provision, and therefore plan their overall later life finances, is to use the \u2018Check your state pension\u2019 service.<\/p>
The forecasts contained in the Check your State Pension service, as far as is practical, take all impacts into account for an individual when determining their state pension entitlement. Since February 2016, over nine million Check your State Pension forecasts have been viewed.<\/p>
In the paper \u2018New State Pension: impact on an individual\u2019s pension entitlement \u2013 longer term effects\u2019 published by the Department on 14 January 2016, we said:<\/p>
The final group potentially affected by changes in uprating mechanisms are those who have been contracted-out of the additional pension system at some point in their working life. This is particularly the case where people were contracted-out between 1978/79 and 1987/88. Under the current system these people are awarded an amount of SERPS which is uprated by CPI once in payment. A contracted-out deduction is also made to account for the fact they paid a lower rate of National Insurance, which reduces the amount of SERPS they receive. The individual receives a broadly equivalent amount to the contracted-out deduction of Guaranteed Minimum Pension (GMP) which is paid by the scheme. There is no requirement on schemes under general occupational pensions and social security legislation to uprate GMPs accrued between 1978/79 and 1987/88. Therefore under the current State Pension system contracted-out deductions relating to this period are not uprated. Since SERPs is uprated by CPI, the amount of SERPS received after a contracting-out deduction is made can grow over time. This complex arrangement will end under the new State Pension system and could lead to some people getting a lower notional outcome.<\/em><\/p> <\/em><\/p> However, there are two key factors that offset these potential notional losses. Firstly, this group will be highly likely to benefit from more of their pension being uprated by the triple lock as explained above. Secondly, people with periods of contracting-out on their National Insurance record are likely to be able to build additional qualifying years from 2016/17 which will add 1/35th of the full nSP amount to the amount they receive, up to the full rate.<\/em><\/p> We have reformed the system to replace it with a simpler one for the future which allows people a clear idea early in their careers of what the state will provide, so they can make their own additional savings plans. www.gov.uk/check-state-pension<\/p>"}
, "answeringMember" : {"_about" : "http://data.parliament.uk/members/4142", "label" : {"_value" : "Biography information for Guy Opperman"}
}
, "answeringMemberConstituency" : {"_value" : "Hexham"}
, "answeringMemberPrinted" : {"_value" : "Guy Opperman"}
, "dateOfAnswer" : {"_value" : "2018-07-10", "_datatype" : "dateTime"}
, "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"}
, "questionFirstAnswered" : [{"_value" : "2018-07-10T15:11:37.07Z", "_datatype" : "dateTime"}
]}
, "answeringDeptId" : {"_value" : "29"}
, "answeringDeptShortName" : {"_value" : "Work and Pensions"}
, "answeringDeptSortName" : {"_value" : "Work and Pensions"}
, "date" : {"_value" : "2018-07-04", "_datatype" : "dateTime"}
, "hansardHeading" : {"_value" : "State Retirement Pensions"}
, "houseId" : {"_value" : "1"}
, "legislature" : [{"_about" : "http://data.parliament.uk/terms/25259", "prefLabel" : {"_value" : "House of Commons"}
}
], "questionText" : "To ask the Secretary of State for Work and Pensions, with reference to the report, The impact of state pension reforms on people with guaranteed minimum pensions, published by the National Audit Office in March 2016, what steps her Department has taken to identify people with guaranteed minimum pensions affected by the introduction of the new State Pension; and what guidance her Department has issued to affected people to help them make informed decisions on their future pension arrangements.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"}
, "tablingMember" : {"_about" : "http://data.parliament.uk/members/4424", "label" : {"_value" : "Biography information for John McNally"}
}
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