Draft Order laid before Parliament under section 42 of the Pension Schemes Act 1993 for approval by resolution of each House of Parliament.

2001 No.

PENSIONS

The Social Security (Reduced Rates of Class 1 Contributions) (Salary Related Contracted-out Schemes) Order 2001

Made

Coming into force

Whereas the Secretary of State has, under section 42 of the Pension Schemes Act 1993, laid before each House of Parliament a report stating what, in view of the report by the Government Actuary under that section, alteration is in his opinion required in the percentages should be under section 41(1A) and (1B) of that Act1:

And whereas a draft of the following Order was, in accordance with section 42 of the Pension Schemes Act 1993, laid before, and approved by a resolution of, each House of Parliament:

Now, therefore, the Secretary of State for Social Security, in exercise of powers conferred on him by section 42 of the Pension Schemes Act 1993 and sections 38 and 181(9A) of the Pension Schemes (Northern Ireland) Act 19932, and of all other powers enabling him in that behalf, hereby makes the following Order:

Citation and commencement1

This Order may be cited as the Social Security (Reduced Rates of Class 1 Contributions) (Salary Related Contracted-out Schemes) Order 2001 and shall come into force on 6th April 2002.

Alteration of reduced rates of Class 1 contributions2

In section 41 of the Pension Schemes Act 1993 and section 37 of the Pension Schemes (Northern Ireland) Act 19933 (reduced rates of Class 1 contributions) in subsection (1B) for “3 per cent”, substitute “3.5 per cent”.

Signed by authority of the Secretary of State for Social Security.

Minister of State,Department of Social Security

(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 42 of the Pension Schemes Act 1993 following a report by the Government Actuary in relation to the contracted-out percentages under section 41 of that Act.

This Order alters with effect from 6th April 2002 the contracted-out percentage to be deducted from secondary Class 1 contributions in respect of members of salary related contracted-out pension schemes for the purposes of section 41 of the Pension Schemes Act 1993 and section 37 of the Pension Schemes (Northern Ireland) Act 1993 (article 2). The contracted-out percentage for primary Class 1 contributions remains unchanged.

In accordance with section 42 of the Pension Schemes Act 1993, a copy of the report by the Government Actuary on the percentages for the time being applying under section 41(1A) and (1B) of that Act and the changes since his last report under section 42 in the factors 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 (or parts of benefits) which, under section 48A of that Act and Schedule 4A to the Social Security Contributions and Benefits Act 1992 (effect of reduced contributions and rebates on social security benefits), are foregone by or in respect of members of salary related contracted-out schemes, was laid before Parliament with a draft of this Order together with a copy of the report by the Secretary of State.

These reports are contained in a Command Paper published by The Stationery Office Limited (Cm. 5076).