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Contracted out
The LGPS was contracted out of the State Earnings Related Pension Scheme (SERPS) and is contracted out of the State Second Pension Scheme (S2P) . This means that you pay reduced National Insurance contributions between the Lower Earnings Limit and Upper Accruals Point (unless you have opted to pay the married woman’s/widow’s reduced rate of National Insurance) up to State pension age. The LGPS guarantees to pay you a Guaranteed Minimum Pension (GMP) for being contracted out of the State Earnings Related Pension Scheme (SERPS) and, for membership after 5 April 1997, the LGPS must meet a reference test prescribed under the Pensions Act 1995.