§ Mr. Freeman
asked the Secretary of State for Social Services what effect he expects the proposed 2 per cent. incentive payment to those who establish new contracted-out pension plans will have on established occupational schemes.
§ Mr. Newton
Apart from its main effect of encouraging the expansion of occupational and personal pension schemes, we expect the incentive payment will also encourage existing occupational pension schemes which are not contracted-out to become so. We do not expect that the payment of the incentive to personal pension holders will undermine existing occupational schemes, as has been suggested by some pensions interests.