The Contracting-out (Miscellaneous Amendments) Regulations 1988

Explanatory Note

(This note is not part of the Regulations)

These Regulations make miscellaneous amendments to regulations about occupational pension schemes which are contracted-out of the earnings-related part of the state pension scheme.

The main changes are to the Occupational Pension Schemes (Contracting-out) Regulations 1984 (“the Contracting-out Regulations”) and provide—

for an employer to be able to exclude from an election to contract-out any employee who requests or agrees in writing that he should be excluded (regulation 2(3));

for an increase, from £5 to £16, in the amount of a state scheme premium below which it need not be paid (regulation 2(4)(a), (9)(a) and (14)(a));

for a reduction, from 8½ per cent. to 7½ per cent. compound, in the fixed rate of revaluation of guaranteed minimum pensions in cases where contracted-out employment ends after 5th April 1988 (regulation 2(6) and (8));

for schemes to be able to provide for fixed or limited rate revaluation of guaranteed minimum pensions when a member’s accrued rights are to be bought out (regulation 2(7) and (11));

for a contributions equivalent premium to be refundable in the period of 7 months after the end of the contracted-out employment in respect of which it was payable where the person in respect of whom it was paid has died without leaving a widow (regulation 2(10));

for the Secretary of State to be able to supply information about guaranteed minimum pensions to any person who is likely to become the responsible paying authority for that pension (regulation 2(12)); and

for schemes to be relieved of the obligation to inform the Secretary of State when effect has been given to the protected rights of married women and widows who pay reduced rate national insurance contributions (regulation 2(14)(b) and (c)).

The remainder of the Regulations make amendments to the Contracting-out Regulations, the Contracting-out (Protection of Pensions) Regulations 1984 and the Contracting-out (Transfer) Regulations 1985 which are consequential on repeals and amendments effected by the Social Security Acts 1985 and 1986.

The report of the Occupational Pensions Board on the draft of these Regulations which had been referred to them, together with a statement showing that the regulations give effect to the Board’s recommendations, is contained in Command Paper No. 337 published by Her Majesty’s Stationery Office.