Skip to main content

Pensions: Rebates

Volume 461: debated on Tuesday 19 June 2007

To ask the Chancellor of the Exchequer what consultations there were between (a) officials and (b) Ministers in his Department and (i) officials and (ii) Ministers of the Department for Work and Pensions in (A) 2005 and (B) 2006 before the decision not to implement fully the recommendations of the Government Actuarial Department on contracted-out rebates for salary-related pension schemes; and if he will make a statement. (141180)

I have been asked to reply.

Decisions on the level of contracted-out national insurance rebates are a matter for the Secretary of State for Work and Pensions. The current contracted-out rebate rates were set out in the Secretary of State's report laid before each House of Parliament on 1 March 2006 and reflected in the rebate Order made on 30 March 2006. This report gave due consideration to the report of the Government Actuary and to other considerations such as the fiscal conditions which prevailed at the time. As with all decisions which have a major impact on public expenditure, including previous rebate reviews, the recommended rates were agreed with HM Treasury.

The Secretary of State has departed from the rebate rates recommended by the Government Actuary on two occasions in the period covered by the question, in addition to the one where the Government Actuary's recommendation for rebate rates from 2007 was not fully implemented. The two occasions were the application of a 9.0 per cent. cap on age-related percentages for contracted-out DC schemes for the period 1999-2000 to 2001-02 tax year, and the application of a 10.5 per cent. cap from 2002-03 to 2006-07.