When does contracting out stop

Normal practice is then to switch to fixed revaluation until the date at which the pension commences payment. Scheme rules often only permit a switch at the time the member ceases to be in contracted-out service.

Since the end of contracting-out, no members are in contracted-out service. Schemes have therefore had to consider whether they need to make any amendments to their scheme rules to enable fixed rate revaluation to be applied upon a member ceasing to be in pensionable service on or after 6 April The main advantage of being contracted-out of the State second pension was the reduced rate of NICS payable by the employer and the scheme members a saving of 3.

However, following the end of contracting-out that saving will no long be available. Unlike defined benefit schemes, there is no guarantee that your eventual pension will match or beat what you would have received if you'd stayed with the state second pension.

The final amount depends on the performance of your investments in the pension into which your rebates were diverted. However, the fact that the money was placed into a defined contribution scheme means that you can benefit from the greater flexibility of the pension freedoms, with the option to access your money at the age of Financial Services Limited. Financial Services Limited is a wholly-owned subsidiary of Which? Limited and part of the Which? Money Compare is a trading name of Which?

Money Compare content is hosted by Which? Limited on behalf of Which? Pension tax relief calculator Pension lump sum withdrawal tax calculator Pension drawdown calculator State pension eligibility calculator Pension calculator - how much will I have?

All 5 calculators. In this article. What was contracting out? If you were contracted out of a defined benefit scheme If you were contracted out of a defined contribution scheme What were protected rights? What does having been contracted out mean for my state pension?

Defined benefit schemes and guaranteed minimum pensions Defined contribution pension performance. Here's what you need to know. For queries about your identity check, email nida nidirect. For queries or advice about criminal record checks, email ani accessni. For queries or advice about employment rights, contact the Labour Relations Agency. For queries or advice about passports, contact HM Passport Office. For queries or advice about pensions, contact the Northern Ireland Pension Centre. If you wish to report a problem with a road or street you can do so online in this section.

If you wish to check on a problem or fault you have already reported, contact DfI Roads. You must have JavaScript enabled to use this form. Enter a valid email address. Contracted-out schemes were required to comply with specific rules about the alternative benefits they provided outside the state pension system. Contracting-out on the salary-related basis was abolished on 6 April But formerly contracted-out salary-related schemes must continue to comply with certain rules about the treatment of contracted-out rights.

Contracting-out on the money purchase basis had previously been abolished on 6 April Free Practical Law trial. To access this resource, sign up for a free trial of Practical Law.