Tynwald has approved plans for a new single-tier Manx state pension.
Legislation has now been approved so that it can be brought in in April next year.
The new pension will apply to people who reach state pension age on or after April 6th – it will see people receive around £180 per week when introduced.
To qualify for the full rate of pension a person will need to have at least 35 qualifying years of National Insurance contributions in the Isle of Man.
People who have accrued significant amounts of additional state pension under the current earnings-related scheme will have those rights protected.
People who have been contracted out of the state additional pension scheme for long periods are unlikely to receive the full amount.
However they will not receive any less under the new scheme than they would have under the existing scheme.
People retiring in the Island who have paid National Insurance contributions in the UK will most likely be entitled to a separate state pension from the UK authorities.
Treasury Minister Alf Cannan says: "The new Manx state pension is being introduced with two primary aims.
"Firstly to ensure the long-term viability of the Manx National Insurance Fund, so that we can afford to pay state pensions for at least the next 70 years.
"And secondly to provide for a simple pension which everyone can understand and can therefore plan for their retirement with a degree of certainty."
The introduction of the single-tier pension means that contracting out of the additional state pension scheme will cease.
Employers and employees who currently pay reduced rates of National Insurance contributions will have to pay the same rates as those who are currently not contracted out.
Minister Cannan adds: "The legislation approved by Tynwald also realigns the state pension in the Island with the UK state pension age for people born between 6th April 1960 and 6th April 1977.
"Consequently, those born between 6th April 1960 and 5thMarch 1961 will have a pensionable age of between 66 years and 1 month and 66 years and 11 months, whilst those born after 5th March 1961 but before 6th April 1977 will reach state pensionable age on their 67th birthday.”
Further orders and regulations will be brought to Tynwald over the next four months in relation to the new pension arrangements.