TITLE

To contract out...or not?

AUTHOR(S)
Firth, Alan
PUB. DATE
January 1976
SOURCE
Accountancy;Jan1976, Vol. 87 Issue 989, p60
SOURCE TYPE
Trade Publication
DOC. TYPE
Article
ABSTRACT
This article argues that if too many workers rely on the state of earnings-related benefits, this could have a serious effect on the economy of Great Britain. The social security Pensions Act 1975 introduces a new state pension scheme which will provide earnings-related benefits from April 1978 onwards. Employers will be able to opt out of part of new state scheme if they operate an occupational pension scheme for their employees where the levels of benefit match up to minimum standards set by the legislation. The new earnings-related benefits will affect all employees earning above a minimum wage level. Self-employed people will not benefit; they will continue to pay earnings-related contributions, but receive only the flat-rate old age pension. The Act introduces a two-tier pension. The lower tier will be on the same lines as the present old age pension and this will continue to be provided under the state scheme. The upper tier will provide an earnings-related pension on earnings above a base level and up to a ceiling. The earnings-related pension can either be provided under the state scheme or, by contracting out, under an occupational pension scheme.
ACCESSION #
6019885

 

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