Thank you for contacting me about the Midland Pension which is now part of the HSBC Bank (UK) Pension Scheme.
As I am sure you will appreciate I am unable to comment specifically on individual cases; however, I can comment generally. When National Insurance contributions and State Pensions were first introduced, a number of employers and employees felt that there was some duplication between the State Pension and their existing schemes. In order to ensure that they and their workers did not have to increase their contributions in respect of pensions, some employers who operated salary-related occupational pension schemes took account of some or all of the State Pension when calculating the occupational pension payable.
The decision on whether a scheme should continue to operate on this basis is a matter for employers. It would not be right to compel schemes to stop, as a retrospective change would impose significant costs. This could result in higher worker contributions to pay for the increase in benefits or causing some schemes to close altogether.
As you are aware, under the previous system many people were 'contracted out' of the additional State Pension by their employer. People who were contracted-out of the additional State Pension either paid lower National Insurance (NI) contributions or some of their NI was instead paid into their workplace or personal pension.
