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Taxpayer to put more into 'golden' pensions for MPs
Nicholas Cecil, Chief Political Correspondent31 Mar 2009
MPs risked outrage today by asking recession-hit taxpayers to pay more for their "gold-plated" final salary pensions.
Less than 24 hours after the furore over their expenses, Commons Leader Harriet Harman outlined changes to the funding of the pension scheme.
Taxpayers already pay 26.8per cent of an MP's pensionable salary into their pension and this is due to rise to 28.7per cent from tomorrow.
MPs will also be asked to increase their contributions to their pensions.
Gordon Brown appeared to bow to public anger over MPs' final salary pensions today by announcing a review which could see them replaced by a less generous scheme.
Liberal Democrat work and pensions spokesman Steve Webb said: "MPs' and other public sector workers' pensions have got to be brought in line with reality.
"With our constituents losing their jobs and seeing their pensions plummet, we simply can't ask taxpayers to pay more for MPs' pensions." Ms Harman - who did not mention the bigger bill for the taxpayer in her statement to the Commons - emphasised that MPs had already agreed in principle to cap the public's contribution to 20per cent of pensionable salary.
However, this limit does not apply to tackling a shortfall in the pension scheme, which has risen from £49.5million to £50.9million, she added.
This means that ministers are proposing that the taxpayer's contribution should rise but not by as much as the Government's actuaries' suggestion of 31.6per cent.
Ms Harman said the Prime Minister had asked the Senior Salaries Review Body to conduct a "fundamental review" of pension provision for MPs as the Treasury's contribution was likely to rise above the 20 per cent cap in the future.
She added: "The Prime Minister has asked the SSRB to consider the full range of options for reducing the Exchequer contribution and to consider, amongst other things, the merits of defined contribution or money purchase arrangements. We expect the SSRB to report later this year.
"The Government is committed to providing public service pension schemes that are affordable and sustainable in the long-term, consistent with the principle of fairness for all taxpayers and between generations."
She also announced that ministers would consult MPs and the Trustees of the Parliamentary Contributory Pension Fund on any proposed changes to be brought in next month.
She added that the Government's "preferred option" included an increase in member contribution of between six per cent and 11.9 per cent.
This would mean that an MP on an 1/40th accrual rate would pay a net increase of about £60 per month on top of the current contribution of £316 per month, she said.
The total annual contribution based on 2009/10 salary would be about £4,625, she added.
Other restrictions, to maintain the 20 per cent cap, would be imposed on MPs to keep down the bill.
Reader views (14)
An MP does not have to clock-in or otherwise obey an employer, therefore an MP is self-employed and not entitled to employer sponsored superannuation. An MP should pay the whole cost of his/her pension.
- Colston Hicks, Cardiff Wales, 31/03/2009 21:39
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George Orwell was correct in stating faceless bureaucrats will hide behind a rhetoric of ambiguous policy,procedure,protocol,to disguise the truth at the Tax Payers expense
- Barry Deane, Richmond, United Kingdom, 31/03/2009 17:59
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Just when you thought it could not get any sleazier -
- Jeremy E, London, 31/03/2009 17:53
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Enough Greed and Sleaze. May I correct your comment, the expression these days is 'I'm alright Jackie' not Jack.
Small point of largess, or as you put it greed. Rest of your comment is spot on.
- Al, Kingstown UK, 31/03/2009 17:49
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Sadly the days when someone entered parliament because they cared about their local community (can we go back to electing those who live in the constituency please?) or even the national community. It is purely a money grabbing exercise - as much money now and even more money when they leave the House (pension) - not to mention the high paid salary they can expect to get by consultancy work for business.
I don't know how the existing pension works but I hope it is on a pro-rata system so if someone is only an MP for 4 years they have a limited pension entitlement.
- Andy, London, 31/03/2009 17:35
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"MPs will also be asked to increase their contributions to their pensions."
No they won't. All this means is that a miniscule amount will be deducted from the salary that I and 30m other taxpayers give them. They, the MPs, will make this up by claiming for some miscellaneous allowance.
- Nobby Clark, Perth, Scotland, 31/03/2009 17:34
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Aren't we poor Taxpayers generous to our masters ?
Let's not forget that ALL of the MP and Government Pensions are paid for by the long-suffering Taxpayer.
We pay their wages, and even the 'personal' contributions (from the Taxpayer-paid wages) will get Tax relief !
Their should be no top-up from the Taxpayer, and like any busted Private Pension scheme, there should be a top amount of £26,000 per annum paid.
....after all, the Public Pensions must be busted as well if the Taxpayer has to top them up.
- Cap, London, 31/03/2009 17:33
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And they are also increasing the government contribution to their pension to 28.7%!!! My company along with many others contributes 6%. These MP pigs with their huge snouts in the trough disgust me.
- Tony, london, 31/03/2009 17:10
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Can we have a say as to where our taxes go? Guess who would rather be funding a new hospital or school rather than line the pockets of these pointless morons. Sack the lot of them - starting with my local MP who is never in touch with local issues and who you can bet is claiming for a second residence as he is never at his home address.
- Gareth, Farnborough, Hampshire, 31/03/2009 17:08
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Two tier Britain, public sector masters and private sector slaves
- Edward Wilson, Geneva Switzerland, 31/03/2009 16:57
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They're getting it all lined up nicely, before so many of them lose their jobs at the next election. When you're earning £200,000 a year, pay and magnificent allowances, you certainly need to shore up your retirement. Bet there's a rush on potted plants, TVs, DVDs, and window cleaning and 88p electric plugs. In the bars of Westminster the buzz is who has dreamed up the best 'hideable' expense - some of them are not too bright and need advice.
- John Problem, Hackney Wick, London, UK, 31/03/2009 16:36
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As MP’s stuff themselves with goodies from excessive expense accounts and OAPs face hardship with higher and higher utility bills and council tax hikes, they now face a reduced ‘Free Buss pass Service’as well.
The double standards practised by self-serving Councillors and Politicians is quite sickening.
Signed
Carl Barron
Chairman of agpcuk
Action Group for the Protection of Communities UK
- Carl Barron, Christchurch, Dorset, 31/03/2009 16:22
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These people have no shame. While we the taxpayer are faced with an uncertain future in these troubled times we now have to read that we will have to pay MORE for MPs "gold-plated" final salary pensions. Why does this not surprise me and to what depths will these contemptuous MPs sink to? The MPs mantra must be 'I'm alright Jack' and correct me if I'm wrong but weren't these same MPs recently up in arms about greed of the bankers. Pot, kettle & black come to mind.
- Enough Greed And Sleaze, London, 31/03/2009 16:09
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Does Her Majesty know she has such an extende family? I always thought it was Royalty who didn't carry cash and therefore couldn't put their hand in their pocket. It would appear I was wrong. these grabbing muppets make Fagin positively saintly.
- Al, Kingstown UK, 31/03/2009 15:44
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