Contracting-out

From 6 April 1978 to 5 April 2016 the Fund was contracted out of the State Second Pension (S2P). Members can be comforted that they are receiving benefits at least as good as the pension they would have received had they remained part of the scheme.
This was a condition of contracting-out of S2P.

This pension is called the Guaranteed Minimum Pension (GMP).

The Government changed the system from 6 April 1997 when GMPs ceased to accrue.

For contracted-out membership from 6 April 1997 to 5 April 2016, the Actuary has to certify that the level of benefits provided under the Fund overall is at least as valuable as that under contracting-out regulations.

Your Basic State Pension is not affected by being contracted-out.

If you were a contributing member of the Fund for any period between April 1978 and April 1997, your pension may comprise an element of GMP which attracts a different rate of increase once you reach GMP payment age, which is 60 for women and 65 for men.

From 6 April 2016, it is no longer possible to contract out of the State Second Pension.