§ Mr. Boswell
To ask the Secretary of State for Work and Pensions (1) what estimate he has made of the number of persons likely to contract out of the state second pension scheme within three years of its inception in April; and how many people are contracted out of SERPS; 
(2) on what basis estimates of future contracting-out from the second state retirement scheme are prepared; and what the confidence limits are for such estimates. 
§ Mr. McCartney
[holding answer 6 February 2002]: As a basis for future financial projections, the Government Actuary has assumed that in 2001–02 there were 13.3 million people contracted out of the additional state pension, rising to 13.7 million people in 2004–05. However, many factors can effect the actual level of contracting out and this assumption will be reviewed and updated as necessary as further data become available.
Projections of national insurance contribution income and benefit expenditure require assumptions of the future level of contracting out from the state second pension. The assumed level of contracting out is estimated by considering data on the level of contracting out through different routes in past years and potential influences on the numbers contracting out in future years, such as the introduction of stakeholder pensions. As with any projections, the assumptions used should not be regarded as precise forecasts of future experience. The potential for change in the projections resulting from variability in the future level of contracting out is considered through sensitivity analysis where appropriate, rather than the use of confidence intervals.
Source:The Government Actuary's Department and "Second Tier Pension Provision 1995–96"—Department for Work and Pensions' Analytical Services Division.