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MPs Vote Themselves Pension Rise By:
Author Unknown
Some
MPs are opposing the deal MPs have
voted themselves an enhanced pension deal, which will be partly funded by
the taxpayer.
The new plan means MPs will not have to serve as long in Parliament in
order to receive their full pension. Members'
contributions will increase from six to nine per cent of salary - but the
taxpayer would pay up to 40% of the extra costs of £860,000 a year, for
the next two years. Deputy Leader
of the Commons, Ben Bradshaw, said it was the government's expectation
that costs would be "clawed back" from MPs and that overall
there would be no additional cost to the taxpayer. The move
comes at a time of great uncertainty about the future of occupational and
private pension schemes. 'Out of
touch' MPs are
proposing a rise from one fiftieth to one fortieth of their annual £55,000
salary to be paid per year of service. They argue
that the precarious nature of the average Parliamentary career means they
deserve a better pension deal.
But some, including Lib Dem pensions spokesman Steve Webb, have spoken out
against the new deal. "We look
as though we are completely out of touch," he told BBC News. "We know
that our own constituents are having real pension problems.
"Whether they are in a company scheme, or a private scheme. It
depends on the stock market. "We as
MPs should be leading by example, not asking our constituents to put an
extra penny into our already very good pension schemes, but concentrating
our energy on tackling the problems that their pension schemes face."
Contribution
holiday Conservative
MP John Butterfill, chairman of the MPs' pension trustees, insisted the
rise was justified. "For at
least the last 12 years, the government, or the Treasury as employer, has
been taking massive contribution holidays. "Every
year during that period they have been putting in less than half the
recommended employer's contribution." The change
was voted through by a committee of 20 MPs. Industry
anger Iain Martin,
editor of Pensions Week magazine, said: "There is a feeling within
the pensions industry generally that what the MPs have done is a total
disgrace. "It
comes at a time when leading unions are threatening to strike over cuts in
pension contributions and fears over the collapse in equity prices." The MPs new
pension arrangements will also benefit the mostly Labour members who
contributed to a public sector pension before they entered Parliament,
Pensions Week claims. These MPs
will be able to transfer into the Parliamentary scheme, and use their
years of public sector contributions to allow them to qualify for full
benefits sooner than normal. The magazine
claims 91 out of the 267 Labour MPs who entered parliament in 1997 will be
eligible to transfer their pension in this way, but new entrants to
Parliament will not. Leaked
letter Tuesday's
vote also coincided with a leaked letter suggesting the new scheme was
opposed by the senior salary review board, which oversees MPs' pay. The Daily
Mail reported that the head of the board, John Baker, had recommended that
MPs should continue to accrue their pensions at the current rate. According to
the Mail, Mr Baker wrote: "The Review Body considered whether an
accrual rate of one fiftieth still seemed appropriate when considered
alongside the rates available in other schemes, particularly those
covering comparator jobs. "The
Review Body concluded that it did and that remains the view." Unpopular
move The measures
were approved by the Standing Committee on Delegated Legislation. They would
enable them to retire on a full pension of two-thirds of their final
salary after 27 years at Westminster, rather than the current 33 years. Leader of the
Commons Robin Cook described the proposals as a "sensible
compromise" intended to reflect the shorter average length of service
undertaken by MPs, which meant only a small number now qualified for the
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