The Social Security (Reduced Rates of Class 1 Contributions, and Rebates) (Money Purchase Contracted-out Schemes) Order 1998

Explanatory Note

(This note is not part of the Order)

This Order, a draft of which has been laid before, and approved by a resolution of, each House of Parliament, is made as a consequence of a review by the Secretary of State under section 42B of the Pension Schemes Act 1993 (“the 1993 Act”) following a report by the Government Actuary in relation to the contracted-out percentages under section 42A of that Act.

This Order specifies with effect from 6th April 1999 the appropriate flat-rate percentage and the appropriate age-related percentages in respect of earners who are members of money purchase contracted-out pension schemes (article 2 and Schedule), and amends the previous Order to restrict its application to the tax years 1997–98 and 1998–99 (article 3).

In accordance with section 42B of the 1993 Act, a copy of a report by the Government Actuary on the percentages which, in his opinion, are required so as to reflect the cost of providing benefits of an actuarial value equivalent to that of the benefits which, under section 48A (effect of reduced contributions and rebates on social security benefits), are forgone by or in respect of members of money purchase contracted-out schemes, together with a copy of the report by the Secretary of State, was laid before Parliament with a draft of this Order.

These reports are contained in a Command Paper published by The Stationery Office Limited (Cm. 3888).