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Pensions

Volume 451: debated on Tuesday 7 November 2006

To ask the Chancellor of the Duchy of Lancaster what the current estimate is of the unfunded liability, in present value terms, of each public sector pension scheme for which her Department is responsible; and on what assumptions for (a) discount rate and (b) longevity the estimate is based. (96055)

Information on the most recent estimate of unfunded liability for the Principal Civil Service Pension Scheme is available in the Resource Accounts 2005-06 of Cabinet Office: Civil Superannuation, a copy of which is available in the Library for the reference of Members. This contains details of the present value of the Principal Civil Service Pension Scheme's liabilities at Friday 31 March 2006 and the discount rate assumption.

The scheme actuary used the same longevity assumptions as applied at the last full valuation as at Monday 31 March 2003. A copy of this report, “Review of the Accruing Superannuation Liability Charges (ALSCs) as at Monday 31 March 2003” is available on the Civil Service Pensions website at http://www.civilservice-pensions.gov.uk/upload/assets/www.civilservice_pensions.gov.uk/aslc_review 31mar03.pdf.

Copies have also been placed in the Library for the reference of Members.

To ask the Chancellor of the Duchy of Lancaster what recent estimate she has made of the (a) rate and (b) annual cost of employer contributions in each public sector pension scheme for which her Department has responsibility; and if she will make a statement. (96065)

Employer contribution rates for Members of the Principal Civil Service Pension Scheme (PCSPS) are assessed for each of four ranges of pay levels and are set at a level which together with employee contributions is intended to meet the costs of benefits accruing in the year. This approach is set out in Resource Accounts 2005-06 of Cabinet Office: Civil Superannuation, a copy of which is available in the Library for the reference of Members. The current employer contribution rates expressed as a percentage of pensionable pay are shown in the table.

Salary band (£)

Rate of employer contribution as a percentage of pensionable pay

18,500 and under

17.1

18,501 to 38,000

19.5

38,001 to 65,000

23.2

65,001 and over

25.5

The average employer contribution is estimated at 19.4 per cent. of pensionable pay. A higher rate, of 26.5 per cent. of pensionable pay, is payable by the Prison Service for prison officers employed before September 1987 and who are entitled to enhanced benefits. The total employer contributions for 2006-07 are estimated at £2.6 billion.

Most civil servants joining the civil service on or after Tuesday 1 October 2002 can, as an alternative to joining the PCSPS, opt for a partnership pension account which is a stakeholder arrangement with an age-related employer contribution varying between 3 per cent. and 12.5 per cent. of pensionable pay. In addition, the employer will match individual contributions up to a maximum of 3 per cent. of pay. In 2005-06, employers contributed a total of £7.7 million to partnership pension accounts.

To ask the Chancellor of the Duchy of Lancaster what her estimate is of the total spending on the Civil Service Pension Scheme for each year from 1980-81 to 2050-51; how many members of the scheme there are; and if she will make a statement. (96533)

Information on total spending on the Civil Service Pension Scheme for the years 2001-02 to 2005-06 is shown in the Resource Accounts of Cabinet Office: Civil Superannuation. The Resource Accounts for 2005-06 also include information on scheme membership. Information on total spending for earlier years is shown in the Appropriation Accounts for the Civil Superannuation Vote. Her Majesty's Treasury accounted for this Vote before 1995, when responsibility moved to the Cabinet Office. Copies of these documents are available in the Library for the reference of Members.

Future estimates for the Principal Civil Service Pension Scheme are included in the total figures for gross spending on unfunded pensions in payment as a percentage of GDP that were published in the December 2005 Long-term Public Finance Report by Her Majesty's Treasury. Copies are available in the Library for the reference of Members.