In March 2018 Tynwald approved the introduction of the new single-tier Manx State Pension from April 2019. This will replace the existing basic and Additional State Pension Scheme and will end “contracting out” for the public sector defined benefit pension schemes. For all contributing members of the schemes listed below, the end of “contracting out” of the Additional State Pension Scheme will mean that their rate of National Insurance Contribution will increase by 1.6% and the rate that an employer pays will increase by 3.7% from April 2019.
- Isle of Man Government Unified Scheme 2011
- Police Pensions Regulations 1991
- Police Pensions Regulations 2010
- Teachers’ Superannuation Order 2011
- The Judicial Pension Scheme 2004
These changes will not affect the accrued benefits that have been built up in public sector pension scheme so far or in the future or the rate of pension scheme contributions members pay.
It simply means that the end of contracting out from April 2019 will mean that members and employers of public sector schemes will have to pay the same NI rates as those who are currently not contracted out.
The scheme members will now be required to pay the standard rate of National Insurance Contribution instead of the contracted out rate. This will mean paying an additional 1.6% rate of National Insurance contribution on earnings between £116 per week and £770 per week. Employers will be required to pay an additional 3.7% rate of National Insurance contribution.
Further information can be found on the Treasury website.
As previous contracted out service will impact on the level of the new State Pension accrued up to April 2019, members can obtain a statement of their State pension benefits.