The state pension is being reformed from April 2016 into a single-tier pension – the ‘new state pension’ - for future pensioners. The introduction of the new state pension means that there will no longer be an additional state pension from which to contract-out. Consequently, contracting-out and the NI rebate will come to an end on 6 April 2016. 

The Occupational Pension Schemes (Power to Amend Schemes to Reflect Abolition of Contracting-out) Regulations 2015 set out the detail to enable employers that sponsor a salary-related occupational pension scheme to amend their scheme rules, in order to mitigate for the increase in national insurance.