DWP launches consultation on contracting-out regulations

The Department for Work and Pensions (DWP) has launched a consultation on the proposed changes to contracting-out regulations.

Pension scheme trustees, their advisers, employers that sponsor contracted-out occupational pension schemes, and the general public have been asked to submit their views on the proposals, which are:

  • To increase the amount of the compound interest used in the fixed-rate revaluation of guaranteed minimum pension for early leavers from 6 April 2012 to 4.75%.
  • To introduce a regulation to allow trustees of formerly contracted-out defined contribution (DC) occupational pension schemes to change their scheme rules to take into account the abolition of protected rights after 6 April 2012.

The consultation also advises of a technical drafting correction to the Occupational pension schemes (contracting-out) amendment regulations 2011, which come into force on 1 October 2011.

The correction provides clarification for actuaries certifying that contracted-out salary-related occupational pension schemes meet the contracting-out conditions.

The consultation will run until 6 November 2011. The draft rules are available on the DWP’s website.

For more article on pension scheme consultations