§ Dr. Mawhinneyasked the Secretary of State for Social Services what action he proposes to take to prevent occupational pension schemes from relinquishing their contracting-out status temporarily in order to obtain financial advantage at the expense of the national insurance fund.
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§ Mr. Patrick JenkinIn certain circumstances it may be necessary for an employer to surrender his contracting-out certificate and legislation provides the opportunity for the relevant pension liabilities to be transferred to the State if premiums arc paid to the national insurance fund. These arrangements will continue, but it has become clear that a combination of high interest rates and low stock market prices can produce a situation where it is possible to select against the national insurance fund by ceasing to contract-out, paying premiums on attractive terms, and contracting-out again almost immediately. I propose to introduce legislation which will give the Occupational Pensions Board discretion to cancel a new contracting-out certificate where it is clear that the easements I have mentioned have been exploited by the surrender, at any time from today, of contracting-out status.