§ Mr. FlynnTo ask the Secretary of State for Social Security what is the effect on an early leaver's pension rights if his period of employment was too short to qualify for a pension under the employer's pension scheme and the employer fails to pay a contributions equivalent premium within the prescribed time limit. [39659]
§ Mr. HealdA contributions equivalent premium is payable to the state if someone leaves a contracted-out salary-related occupational pension scheme before state pension age with less than two years' pensionable service with his employer. Payment of a CEP means that the employee's rights under the state earnings-related pension scheme are restored as if he had not been in contracted-out employment. Where a CEP is not paid within the prescribed time limit the employer's pension scheme remains liable to provide a guaranteed minimum pension and is notified accordingly by the Contributions Agency. There is no liability to pay a CEP which does not exceed £17.00. In this situation, the amount payable is treated as having been paid and the earner's SERPS rights restored as if he had not been in contracted-out employment.
819W