The IWMPS and State pensions
Members of the IWMPS are contracted out of the State Second pension (S2P) and its predecessor the State Earnings Related Pension Scheme (SERPS). This means that whilst in contributing service, members and their employers pay, the lower ‘contracted out’ rate of National Insurance contributions and that members will not have a full entitlement to a pension from S2P or SERPS during their membership of the IWMPS. The IWMPS satisfies the statutory tests for the minimum level of benefits that contracted out schemes must provide. For most members IWMPS benefits will exceed those that would have been payable from S2P or SERPS.
Membership of the IWMPS does not affect entitlement to the State basic pension.
Changes to the State Pension from 6 April 2016
The Government’s changes to the State Pension come into effect from 6 April 2016, with the introduction of the single-tier flat-rate pension for those attaining State Pensionable Age from 6 April 2016. One consequence of the new arrangements is the end of contracting-out for members of defined benefit pension arrangements, including the IWMPS. This is important for members still contributing to the IWMPS at the 6 April 2016, as it will affect the level of take-home pay for these members. This is because of the removal of the “contracting-out rebate”, which means both members and the employer will have a higher amount deducted in National Insurance contributions from 6 April 2016.
In accordance with the changes to contracting-out, the IWMPS will therefore cease to be a contracted-out scheme on 6 April 2016.
If you are no longer contributing to the Scheme or you attain State Pensionable Age before 6 April 2016, these changes will not apply to you.
Further information about your State Pension entitlement can be obtained from the government website:
You can obtain an online forecast of how much State Pension you are currently likely to receive (prior to the change to the new single-tier pension) at:
Following recent changes, your own State Pension Age depends on your gender and your date of birth. You can out your exact State Pension Age under current law at: