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Premium Under Section 40: Additional Provisions

Volume 893: debated on Wednesday 11 June 1975

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'(1) The amount of a contributions equivalent premium shall be the equivalent, as certified by the Secretary of State, of the amount by which the Class 1 contributions payable in respect of the earner's employment in contracted-out employment by reference to the scheme have fallen short of what would have been payable if the employment had not been contracted-out; and in certifying any amount under this section the Secretary of State may make such adjustments as he thinks necessary for avoiding fractional amounts.

(2) Where under the rules of the scheme transfer credits have been allowed in respect of the earner's accrued rights under another scheme, the references in section (Premium on termination of contracted-out employment) (1), and in subsection (1) above, to contracted-out employment by reference to the scheme shall include references to employment in any period of linked qualifying service which was contracted-out employment by reference to the other scheme.

(3) For the purposes of section (Premium on termination of contracted-out employment) (2), a scheme conforms to the appropriate extent with the preservation requirements of Part II of the Social Security Act 1973 if—

  • (a) it entitles the earner to short service benefit within the meaning of those requirements; or
  • (b) it makes any provision which under those requirements is permitted as an alternative to short service benefits (other than provision for return of contributions or for benefit in the form of a lump sum).
  • (4) Except in such cases as may be prescribed, an employer shall not, in making or abstaining from making elections under section (Premium on termination of contracted-out employment) (2) or (3), discriminate between different earners on any grounds other than their respective length of service; and if the Occupational Pensions Board consider that an employer is contravening this subsection, they may cancel any contracting-out certificate held by him in respect of the scheme in question.

    (5) An election by an employer under section (Premium on termination of contracted-out employment) (2) or (3) must be made within the prescribed period in the prescribed manner; and where an employer elects to pay a premium in respect of an earner, he shall pay it to the Secretary of State within the prescribed period.

    (6) Payment of a premium under section (Premium on termination of contracted-out employment) (2) shall operate to extinguish the earner's accrued rights to guaranteed minimum pensions under the scheme; and payment of a premium under section (Premium on termination of contracted-out employment) (3) shall operate to extinguish any right to guaranteed minimum pension in respect of the widow.

    (7) Subject to regulations made under paragraph 1 of Schedule 2 to this Act, an employment which is terminated by the death of the employer shall be treated for the purposes of section (Premium on termination of contracted-out employment) as terminated immediately before the death'.—[ Mr. O'Malley.]

    Brought up, read the First and Second time, and added to the Bill.