The Pensions Act 2007 provided for reform of the State Second Pension (S2P) so that it would become a flat-rate top-up to the basic state pension by 2030. Some of the proposed changes have been brought forward and will now be introduced on 6 April 2009. One change which may impact upon the rules of some occupational pension schemes is a change to the cap on earnings which will count for S2P. Please click here for a briefing giving further information on what changes may be required.
Other, more minor, contracting out changes include:
- removing the requirement for employers to consult trade unions before surrendering a contracting-out certificate on winding-up; and
- allowing a scheme which used to be a contracted out salary related (COSR) scheme to make the same transfers as a current COSR scheme can make to another COSR scheme.