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

Explanatory Note

(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).