The Social Security (Contracting-out and Qualifying Earnings Factor and Revision of Relevant Pensions) Regulations 2000

Explanatory Note

(This note is not part of the Regulations)

The Regulations contained in this instrument are made before the end of the period of six months beginning with the coming into force of section 38 of the Child Support, Pensions and Social Security Act 2000 (c. 19) and are made in consequence of that Act.

Regulation 2 modifies the application of section 44(5A) of the Social Security Contributions and Benefits Act 1992 which determines the amount of a Category A retirement pension by reference to a qualifying earnings factor calculated by multiplying the weekly lower earnings limit for a year by 52. The modification applies in relation to an earner who has earnings in a tax year beginning on, or after, 6th April 2000, part of which are in respect of contracted-out employment and part of which are not. It also applies to an earner in respect of whom minimum contributions are paid for part of such a tax year. The calculation of the qualifying earnings factor is modified in such cases by multiplying the weekly lower earnings limit for the relevant year by 52 less the number of weeks of contracted-out employment.

Regulation 3 provides that a relevant pension calculated in accordance with section 44(5) of the Social Security Contributions and Benefits Act 1992 as modified under section 48A of the Pension Schemes Act 1993, is to be revised using the formula set out in Regulation 2 and paid in accordance with the revised calculation.

These Regulations do not impose any costs on business.