The GAD has published a consultation paper on contracted-out rebates for the five years from April 2002. For employees in COSR schemes, the rebate is set to rise from 4.6 to 5.1% of band earnings. For COMP scheme members, the age-related rebates will start at 2.6% (currently 2.2%) for those aged 15 last birthday, with this 0.4% differential over 2001/02 rates more or less maintained up to age 50. From age 50, larger increases are proposed, with no 9% cap as at the moment.

APPS age-related rebates will not rise by so much: for the youngest, 4.2% (3.8% in 2001/02), with a similar increase up to age 23. Between ages 23 and 50 the proposed rebate will actually be lower than in 2001/02; but beyond age 50 the current cap of 9.0% will be breached as rebates for 2002/03 rise from 9.9% at 50, to 16.7% at 63.

Assumptions about future investment returns are slightly more cautious (2% pre-retirement, relative to earnings, and 3.5% post-retirement, relative to prices; current rebates are based on 2.25% and 3.75% respectively). Other assumptions made are 85% or population mortality for spouses of all members of contracted-out arrangements; that all COMPS and APPS members are married at pensionable age, and that a larger proportion of COSRS members will be women.