The main aim of this change was to skew existing Additional Pension (AP) benefits in favour of low and moderate earners at the expense of higher earners and to extend access to include certain carers and people with long-term illness or disability for the first time.
Any SERPS entitlement already built up is retained and revalued each year in line with the changes in average earnings (that is, in "real" terms) until State Pension Age.
It is then added to any Basic State Pension payable, and the combined amount uprated thereafter in line with the index of retail prices (RPI).
At the "3 × LET - 2 × LEL" threshold (£32,592 a year) SERPS and S2P pensions are equal and the same rate of accrual (20 per cent) applies above that.
If an employed earner had annual earnings above the LEL they become part of State Pension scheme, and must pay some National Insurance contributions.
When the employee retires their second pension then comes partly from the employer's scheme (deemed funded from the lower rate of contributions collected being diverted to this purpose) rather than the Additional Pension, although most people will continue to build up some entitlement to AP at the same time.
Whether it does or not rests on the investment returns from the rebate being sufficient to purchase additional income (usually in the form of an annuity.)
As previously stated, this comes from In 2006 the government announced changes to both the Basic and the Additional Pension.