Fairness in Pension Provision

Part of the debate – in Westminster Hall at 4:15 pm on 8th April 2014.

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Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions 4:15 pm, 8th April 2014

It will to some extent, for reasons that I will explain. When an individual is contracted out, they will receive a smaller state pension than they would have done, because they are building up only a basic state pension, not SERPS. However, they will not get a smaller pension than they would have done, because the company promises to match the SERPS pension that they would otherwise have received. When somebody retires and says, “I am only getting 16 quid of SERPS”, what matters is not the SERPS figure—in a sense, they might be getting zero SERPS—but the SERPS figure plus the occupational pension promise together.