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:
“The general tendency of things throughout the world is to render mediocrity the ascendant power among mankind.”
—John Stuart Mill (1806–1873)
“Well, you Yankees and your holy principle about savin’ the Union. You’re plunderin’ pirates that’s what. Well, you think there’s no Confederate army where you’re goin’. You think our boys are asleep down here. Well, they’ll catch up to you and they’ll cut you to pieces you, you nameless, fatherless scum. I wish I could be there to see it.”
—John Lee Mahin (1902–1984)