Contracted out of SERPS & Company Pension

tracyk

Have been contracting out of SERPS since the early days when it was the thing to do - have since started paying into a company pension - will this be a problem?

TIA.

EdInvestor

I guess you have another old pension that you were contracted out into, do you? That's where the rebate money has been going?

If the new company pension is a contracted out one, they will probably arrange that your rebates from now on will go there.

But if it's not a contracted out scheme, then the rebates should still go to the old pension.

Sorry if that's confusing. :huh:

Have a word with your pension department to check the state of play.It wouldn't be a bad idea to check the state of that old pension too. Some of those old pensions should be moved into better funds, especially if they are in With profits..

dunstonh

contracting out with an occupational pension scheme means something different to contracting out with an appropriate personal pension (APPP).

If the new occ scheme is contracted out, then automatically, the old APPP would cease to receive the rebates and these would go to the administrators of the occupational scheme instead.

The APPP will continue to be tagged as contracted out but wont receive any rebates again unless you change employer and the new employer doesnt operate a contracted out occupational pension.

david78

dunstonh wrote:

If the new occ scheme is contracted out, then automatically, the old APPP would cease to receive the rebates and these would go to the administrators of the occupational scheme instead.

I thought most if not all occupational schemes that are contracted out don't receive a rebate, but the employee just pays lower National Insurance in the first place. If so could not the original poster just check his National Insurance contributions.

dunstonh

I was being ecomomical with the explanation. It can get very messy and hard to follow when talking about contracting out differences. It just felt easier to explain it that way. You are correct on the actual way it is done though.

For those brave enough, there is more information at : http://www.thepensionservice.gov.uk/atoz/atozdetailed/addstatepen.asp