PracticeConsultingSERPS plans get PAC approval

SERPS plans get PAC approval

The Public Accounts Committee has given its approval to the government's new £12bn proposals for dealing with the inherited State Earnings Related Pension Scheme.

MPs accepted a plan to phase in a halving of the pension entitled to a surviving spouse, after rejecting an earlier proposal giving a spouse the right to full pension entitlement. Rules introduced in the Social Security Act 1986 to cut the amount of SERPS inherited by surviving spouses from 100% to 50% were due to come into force next month.

From 1987 to 1996 information leaflets were issued that did not refer to the change meaning some people may have lost out. In addition some Benefits Agency staff also gave wrong information to a number of people.

PAC chairman David Davis said: ‘These proposals are significantly better for pensioners than the original scheme, which would have been unworkable. They represent a victory for parliament as well as for common sense.’

The original plan, which delayed implementation of the pension cut, but provided compensation for those who could show they were misled, was rejected as being too difficult for pensioners to understand and having not been properly advertised to them.

SERPS are a top-up to the basic state pension entitlement and are variable according to level of earnings. It was designed to bring SERPS into line with most occupational pension schemes, where it is usual for half occupational pension rights to be inherited by a surviving spouse.

In 1998, the government began trying to persuade people to leave SERPS in favour of private pension schemes by offering them high levels of compensation, in the form of an annual payment into their private scheme.

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer