SERPS (Hansard, 21 November 2002)

§ Mr. McCartney

Officials are currently finalising detailed plans in response to the Parliamentary Ombudsman's findings. However, we expect to be writing to around 500,000 individuals to offer further clarification of their SERPS position.

The background to this is that the Pension Service has sent out 5.1 million letters to people who will reach state pension age between 6 October 2002 and 5 October 2010. This letter informed them of the changes to the rules regarding the inheritance of SERPS announced to the House by my predecessor on 29 November 2000 and subsequently approved by Parliament in March 2001.

This letter gave people the option of requesting a SERPS estimate, and by 16 November some 1,248,104 estimates had been requested.

This follow-up estimate letter was the subject of exhaustive drafting and an approval process that included the Social Security Advisory Committee (SSAC) and outside bodies. One key complexity was around how to explain SERPS and its interaction with Contracted Out Deductions (COD).

However, it has come our attention that some people may have possibly misunderstood the estimate despite the caveat in the letter. This group may believe that they stand to receive their full SERPS without appreciating that if they have contracted out, their SERPS will be lower because of their occupational or private pension scheme.

We have therefore decided that officials should write again to all those people who have received an estimate letter and have some COD deductions except people who will reach pension age between now and 5 July 2003-they will get pre-retirement pensions claim material including full personal details of their new final entitlement.

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In addition we will continue the provision of the very successful Contact Centre, incorporating a helpline which has already dealt with in excess of 270,000 phone calls and 1.5 million pieces of post.