Payable Uprated Contracted-out Deduction Increments meaning

A Payable Uprated Contracted-out Deduction Increment (PUCODI) was a small addition to a person’s UK state pension paid where they had been contracted out of SERPS/S2P (1978–1997), deferred taking their guaranteed minimum pension (GMP) and earned GMP deferral increments. Because pension schemes did not fully index those GMP increments, the contracted-out deduction (COD) applied to the individual’s additional state pension was uprated, and the government paid a compensating amount with the State Pension (the PUCODI) to reflect that uprating. The mechanism arose from social security legislation governing the additional State Pension and COD and was administered by DWP; it is an administrative term used in pensions practice rather than a commonly defined statutory expression. New PUCODI awards were abolished by the Pensions Act 2011 with effect from 6 April 2012. Existing awards may continue in payment, but no new entitlements can arise. Usage and effect are consistent across England and Wales, Scotland and Northern Ireland (parity rules). The concept does not apply in Ireland, where there is no GMP or contracted-out deduction. PUCODIs now arise only in legacy State Pension calculations and historic contracted-out/GMP deferral cases.