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CBI: consultation plans crucial to protecting final salary schemes and jobs

The CBI has commented on the government's consultation on giving businesses the power to offset the rise in employers’ National Insurance (NI) payments for contracted-out pensions - and allowing former nationalised industries to override Protected Persons Regulations.

Neil Carberry, CBI Director of Employment and Skills, said:

“It is good news that ministers have recognised that big increases in NI payments need to be fully off-set when the State Second Pension is scrapped.

“We’ve long-argued that abolishing the current NI rebate on contracted-out pensions could cost businesses up to £1285 for each scheme member, running into tens of millions each year for some.

“The change will also rightly prevent the new state pension reducing take home pay for scheme members.

“Powers also must be given to employers running formerly nationalised industries and utilities to adapt to state pension reform.

“During privatisation, employees were given specific legal protection to prevent their benefits or accruals being reduced. The CBI has been calling for a time-limited, statutory ‘override’ to this, so their pension schemes remain afloat and they can treat all their employees equally, whenever they started their jobs.”


1. The CBI argued in its June 2011 response to the Government’s Green Paper on state pension reform that it could not support any reform that did not fully mitigate the ending of contracting out defined benefit schemes from the State Second Pension – by allowing employers to offset the increase in their National Insurance Contributions.

 2. The Government published its White Paper The Single Tier Pension: A Simple Foundation For Saving on 14th January 2013. The draft pensions bill was published on 18th January 2013.