- guaranteed minimum pension
An employer can contract out of the SERPs element out of the state pension scheme (hence qualifying for a contracted-out rebate on NIC's ) by means of an occupational pension scheme. There are strict rules relating to occupational pension schemes generally and contracting-out. Benefits under a contracted-out scheme must be at least as good as SERPs benefits and such schemes must ensure a "guaranteed minimum pension". An occupational pension scheme need not be contracted out. Occupational pension schemes set up by smaller companies are often insured - whereby an insurance company takes over all responsibilities in return for a premium.
Easyform Glossary of Law Terms. — UK law terms.
- guaranteed minimum pension
(GMP)Pensions arising under salary-related schemes which have contracted-out of the state scheme, that are guaranteed at a minimum level based on the amount the pensioner would otherwise have received under the state scheme. GMPs ceased to accrue after 5 April 1997.Related linksmulti-employer scheme (multi-employer pension schemes)
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.
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state earnings-related pension scheme — (SERPS) United Kingdom An additional state pension based on the employee s national insurance contributions (NICs) and earnings. It ran from 6 April 1978 to 5 April 2002 when it was replaced by the … Law dictionary