Paragraph 3

In section 29 (contracted-out rates of benefit) the following subsections shall be inserted after subsection (2)—

“(2A)

Subject to subsection (2B) below, where for any period minimum payments have been made in respect of an earner to an occupational pension scheme which, in relation to the earner’s employment, is a money purchase contracted-out scheme, then, for the purposes of this section and sections 16(2B), 28(7A) and 59(1A) of the principal Act—

(a)

the earner shall be treated, as from the date on which he reaches pensionable age, as if he were entitled to a guaranteed minimum pension at a prescribed weekly rate arising from that period in that employment; and

(b)

in prescribed circumstances, in relation to any widow or widower of the earner—

(i)

if the earner died after reaching pensionable age, any widow or widower of the earner shall be treated as entitled to a guaranteed minimum pension at a rate equal to one-half of the rate prescribed under paragraph (a) above; and

(ii)

if the earner died before reaching pensionable age, any widow or widower of the earner shall be treated as entitled to a guaranteed minimum pension at a prescribed weekly rate arising from that period.

(2B)

Where the earner is a married woman or widow, subsection (2A) above shall not have effect in relation to any period during which an election that her liability in respect of primary Class 1 contributions shall be a liability to contribute at a reduced rate is operative.

(2C)

The power to prescribe a rate conferred by subsection (2A)(a) above includes power to prescribe a nil rate.”.