Under the Pension Schemes Act 1993, an employer can contract out of the SERPs element of the state pension scheme (hence qualifying for contracted-out rebate on National Insurance Contributions) by means of an occupational pension scheme. There are strict rules relating to occupational pension schemes generally and to contracting out. Benefits under a contracted- out scheme must be at least as good as SERPs benefits and such schemes must attain the "guaranteed minimum pension". An occupational pension scheme need not be contracted-out.
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