News: Contracting out comes up short.

Pensions Week, July, 2004

The government has chipped away at rebates making contracting out of the state second pension increasingly the wrong option for pension schemes, it was said last week.

National Insurance rebates are often worth far less than the state benefits lost by contracting out, it was claimed.

Research conducted by Mercer Human Resource Consulting suggests the government needs to pay up to an extra GBP3.8bn a year in rebates to redress the balance or else there was likely to be a surge of people contracting back into the state scheme.

Dick Strattan, worldwide partner at Mercer Human Resource Consulting, said: "In recent years, governments have chipped away at the rebates and changed the ground rules.

"Investment returns have dropped and people...

Read the rest of this article with a Free Trial at HighBeam Research.

Premium Content Partnership | HighBeam Research provides an in-depth online archive library of reference works.