David Cameron says MPs will face same pension changes
Published: 29th Jun 2011 17:55:47
MPs should face "exactly the same changes" to their pensions as those imposed on public sector workers, David Cameron has said.
MPs have a funded final salary scheme, they pay a fixed contribution and the Exchequer is liable for the balance.
Commons Leader Sir George Young is expected to make a statement about MPs' pensions before the summer recess.
Four unions are to strike on Thursday over government proposals to change public sector pensions.
The government says the fact that people are living longer means the cost of public sector pensions has been "unsustainable" and changes have to be made.
They are being urged to pay more into their pensions, work for longer and accept a pension based on a "career average" salary, rather than a final salary.
MPs have their own scheme - the Parliamentary Contributory Pension Fund - a funded final salary scheme which, as of the end of March 2010, had 646 active members, 876 pensioners and 164 deferred pensioners.
We are public sector workers as well and we should be subject to exactly the same changes we are asking others to take on”
At prime minister's questions on Wednesday, Conservative MP Claire Perry told Mr Cameron there was a "contract between taxpayers and MPs" when it came to pensions.
She said: "Do you agree with me that we should be in the vanguard of reforming our own pensions so we can look our public sector constituents in the face?"
Mr Cameron - who in opposition described MPs' final salary scheme as "very generous" - replied: "I agree with you that we are public sector workers as well and we should be subject to exactly the same changes we are asking others to take on.
"So the increase in contributions should apply to the MPs' system, even though it is a system where we pay in quite a lot.
"We are saying right across the board that the increase in pensions contributions is right to create a healthier, long-term system."
Lord Hutton's review of public sector pensions did not include MPs' arrangements but in the March budget Chancellor George Osborne said : "I believe this House should also recommend similar changes to the pensions of MPs."
MPs contribute either 11.9%, 7.9% or 5.9% of their £65,738-a-year salaries - the normal retirement age is 65.
The Treasury has previously announced public sector staff will pay an average additional contribution of 3.2% of their salaries, phased in between 2012 and 2014.
The MPs' expenses watchdog Ipsa is due to take control of MPs' pensions from April 2012, subject to a parliamentary procedure to allow the change.
Sources have declined to say whether MPs' would have to make an additional 3.2% in contributions and whether any change would be made before or after Ipsa took control.
The 2008 valuation of the MPs' pension scheme found there was a £51m deficit, and in July 2009, MPs agreed to increase their contribution rates and cap the amount the Exchequer contributes at 28.7%.
The Exchequer contribution to the MPs' scheme is higher than "employer contributions" to other public sector pension schemes including teachers, the NHS, civil service, police and fire service schemes, according to Lord Hutton's report on pensions.
In their coalition agreement, the Conservatives and Lib Dems agreed to "consult" with the Independent Parliamentary Standards Authority (Ipsa) about "how to move away from the generous final-salary pension system for MPs".
In opposition both the Lib Dems and Conservatives called for the scheme to be reformed - Gordon Brown also ordered a review, when he was prime minister, to halt the growing cost to the taxpayer.
Last July the Senior Salaries Review Body published its report, which recommended changing parliamentary pensions from a final salary to a career average scheme, increasing the retirement age from 65 to 68 and and standardising the accrual rate at 1/60th of salary.
At 18:57:29 in EnglandThe summer of 2013 saw a sleepy Sussex village hit the headlines as months of protests over fracking led to dozens of arrests.
At 18:54:29 in EnglandA man arrested when a 19-year-old was hit by a car on the M23 near Crawley has been freed without charge.
At 18:48:57 in SportBritish number one Laura Robson will miss the French Open and Wimbledon after having minor wrist surgery.
At 18:48:12 in ScotlandLandowners have reacted angrily to claims the persecution of birds of prey on Scotland's grouse moors has returned to levels last seen in the Victorian era.
At 18:38:55 in EnglandKeyhole surgery for upper gastrointestinal cancer (GI) has been stopped indefinitely at a Kent hospital after the deaths of five patients.
At 18:36:55 in EnglandA man in his 70s died when his car crossed a junction and hit a fence in Weybridge.
At 18:26:57 in Northern IrelandA 20-year-old woman has been the victim of a serious sexual assault in Armagh.
At 18:24:04 in ScotlandThe case against a delivery van driver accused of causing the death of a nine-year-old boy on an Aberdeenshire street has been found not proven.
At 18:20:02 in EnglandA man who died in a house fire in Gateshead has been named.
At 18:11:51 in ScotlandA former West Lothian councillor has been convicted of embezzling an elderly couple's life savings.
Harvard CitationBBC News, 2011. David Cameron says MPs will face same pension changes [Online] (Updated 29th Jun 2011)
Available at: http://www.ukwirednews.com/news/166205/David-Cameron-says-MPs-will-face-same-pension-changes [Accessed 17th Apr 2014]
News In Other Categories
Retirees could be issued guidance on how long they are likely to live, a government minister has said.
British number one Laura Robson will miss the French Open and Wimbledon after having minor wrist surgery.
With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com
China's largest Twitter-like service, Weibo, has had a lukewarm reception on the first day of its listing on the US stock market.
The summer of 2013 saw a sleepy Sussex village hit the headlines as months of protests over fracking led to dozens of arrests.
BBC News presenter George Alagiah has been diagnosed with bowel cancer.