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Departmental Pensions

Volume 475: debated on Tuesday 6 May 2008

To ask the Secretary of State for Defence (1) what his most recent estimate is of the unfunded liability in present value terms of each public sector pension scheme for which his Department is responsible; and on what assumptions for (a) discount and (b) longevity the estimate is based; (200751)

(2) what the unfunded liability in present value terms was of each public sector pension scheme for which his Department is responsible in each year since 1990-91;

(3) what the (a) rate and (b) cost was of employer contributions for each public sector pension scheme for which his Department has responsibility in each year since 1990-91; and if he will make a statement;

(4) what the effect on his Department’s expenditure would be of increasing the employee contribution to each pension scheme for which his Department is responsible by 1 per cent.; and if he will make a statement;

(5) what the cash equivalent transfer value is of the public sector pensions of the 10 highest paid members of staff in his Department and its Executive agencies; and if he will make a statement.

The Ministry of Defence is only responsible for the Armed Forces Pension Scheme (AFPS). The Cabinet Office has responsibility for the Principal Civil Service Pension Scheme (PCSPS). The information requested on the AFPS is contained within the AFPS resource accounts which are available in the Library of the House. The first set of resource accounts produced for the AFPS was for financial year 1998-99. These were un-audited as this was regarded as a ‘dry run’ for resource accounting within the MOD.

None was produced prior to this and therefore information is only available from this date. The first formal set of AFPS resource accounts to be published was in financial year 1999-2000.

It should also be noted that the AFPS is a non-contributory pension scheme and as such, the only contributions made are those made by the employer, which in this case is the MOD.

The total cash equivalent transfer value (CETV) for the pensions of the 11 highest paid members of the MOD totalled some £13.945 million as at 31 March 2008. Many of these individuals are named in the remuneration reports that form part of the MOD’s resource accounts and the cash equivalent transfer value of their public sector pensions is therefore reported annually. The remuneration reports are already in the public domain. I have reported 11 highest paid members of staff because the 10th and 11th members of staff are on the same salary rate. The CETV figure given includes both armed forces and civilian personnel.