Skip to main content

Civil Service Pensions

Volume 451: debated on Monday 30 October 2006

To ask the Chancellor of the Duchy of Lancaster (1) what the annual savings would be from increasing civil service employee contribution rate to the civil service pension scheme by 1 per cent.; and if she will make a statement; (93542)

(2) what recent estimate she has made of the annual saving from increasing the employee contribution rates to the civil service pension scheme by 1 per cent.; and if she will make a statement.

Members of the Principal Civil Service Pension Scheme made normal contributions of £280 million in the year to 31 March 2006 plus additional contributions of £32 million for the purchase of added years.

If contribution rates had been one percentage point higher than they are, the contributions received by the Civil Superannuation Vote would have been some £141 million higher than was the case. However, the overall impact on public finances would have been less than this as members do not pay income tax on pension contributions.

To ask the Chancellor of the Duchy of Lancaster (1) what the (a) present and (b) future retirement age arrangements are for each public sector pension scheme for which her Department has responsibility; and if she will make a statement; (96025)

(2) what the current (a) accrual rate and (b) normal retirement age is for each public sector pension scheme for which her Department is responsible; and if she will make a statement.

The Principal Civil Service Pension scheme is in two sections. Section 1—the “2002 section”—is referred to as the premium scheme and has a pension accrual rate of 1/60th. Section 2—the “1972 section” is referred to as the classic scheme. Classic has a pension accrual rate of 1/80th plus a lump sum accrual rate of 3/80th.

The current normal pension age for members of both schemes is 60. However, some prison officers who are members of classic have a normal pension age of 55.

In line with the principles agreed with the trade unions at the Public Services Forum in 2005, a new pension scheme will be introduced for new entrants tothe civil service which will have a pension age of 65.