皇冠体育app

皇冠体育app Government has published details of the contracted-out rebate rates that will apply from 2012. 皇冠体育app new rates have been laid in a draft Order today.

It is a legal requirement for the rebate rates to be reviewed at least every five years.

Pensions Minister Steve Webb said:

I welcome the Government Actuary鈥檚 report on contracted-out rebates and accept their best estimate approach.

皇冠体育app current reduction in National Insurance contributions is provided at considerable cost to the tax payer. 皇冠体育app Government has a duty to ensure that the rebates are set at a level which is fair to all, and that the rates are not seen to favour those who are contracted-out of the State second pension.

皇冠体育app key rates that have been set out relate to defined benefit occupational (final salary related) schemes.

At the moment if an individual is contracted out of the State second pension, the employer and the employee pay National Insurance Contributions reduced in total by 5.3%.

皇冠体育app new rebate will mean that from April 2012 if an individual is contracted out, the employer and the employee pay National Insurance Contributions reduced in total by 4.8%.

皇冠体育appse decisions are based on the Government Actuary鈥檚 report.

Notes for Editors

1. 皇冠体育app rebate Order was laid in draft today (3 February 2011) along with: * 皇冠体育app Explanatory Memorandum to the Order. * 皇冠体育app Report by the Government Actuary on the Review of rebates and reduced rates of National Insurance contributions for members of defined benefit contracted-out pension schemes. * 皇冠体育app Report by the Government Actuary on the Review of rebates and reduced rates of National Insurance contributions for members of defined contribution contracted-out pension schemes. * 皇冠体育app Report by the Secretary of State for Work and Pensions in accordance with sections 42(1) and 45A(1) of the Pensions Act 1993 on the Order.
2. For the tax years from 2012 to 2017, the Government proposes that the rebate for defined benefit schemes should be 4.8%. This will be split 3.4% for employers (secondary Class 1 contributions), 1.4% for employees (primary Class 1 contributions).
3. 皇冠体育app rebate Order contains figures to enable the calculation of rebates for members of defined contribution contracted-out schemes for the tax year 2012-13. While it is planned to abolish contracting out on a defined contribution basis from 6 April 2012, the legislation enabling this change will not be brought into force until 2012.聽 As such the requirement to review defined contribution rebates every 5 years remains. As these figures are not expected to be used, they have only been provided for one tax year.