General Principle
The purpose of the scheme was to provide a pension related to earnings, in addition to the basic state pension.
The principle was that everyone would receive a SERPS pension of 25 per cent of their earnings above a "lower earning limit" (approximating to the amount of the basic state pension). The scheme was phased in over twenty years so that those retiring before 1998 received a SERPS pension proportional to the number of years that they had made contributions to it. There was an "upper earning limit" of about seven times the lower earning limit, beyond which earnings were disregarded for NI contributions and calculation of SERPS pensions.
Under the Social Security Act 1986 the target SERPS pension was reduced from 25 to 20 per cent of average earnings between the two limits. Pensions earned before 6 April 1988 were not reduced and the change was to be phased in for people retiring between 1999 and 2009.
Read more about this topic: State Earnings-Related Pension Scheme
Famous quotes containing the words general and/or principle:
“I have never looked at foreign countries or gone there but with the purpose of getting to know the general human qualities that are spread all over the earth in very different forms, and then to find these qualities again in my own country and to recognize and to further them.”
—Johann Wolfgang Von Goethe (1749–1832)
“The more the specific feelings of being under obligation range themselves under a supreme principle of human dependence the clearer and more fertile will be the realization of the concept, indispensable to all true culture, of service; from the service of God down to the simple social relationship as between employer and employee.”
—Johan Huizinga (1872–1945)