In the spending review 2010, the Government announced their intention to increase employee contributions in public service pension schemes. This followed on from Lord Hutton’s interim report on public service pensions1 which concluded that there was a clear rationale for public servants to make a greater contribution if their pensions were to remain fair to taxpayers and employees and affordable for the country.
The ministerial pension scheme was not covered by Lord Hutton’s recommendations, but I consider it appropriate that its members face similar changes.
In 2012-13 pension contributions were increased in a similar way as applied to other public service pension schemes, and further increases for 2013-14 will apply from 1 April 2013. This will mean that:
Secretaries of State, the Leader of the Opposition in the Commons and Mr Speaker in the House of Lords will pay an additional 2.4 percentage points of pay, and a total of 4.8% higher than 2011-12;
Ministers of State, the Government Chief Whip, the Leader of the Opposition in the Lords, the Chairman of Committees of the House of Lords and the Deputy Chairman of Committees of the House of Lords will pay an additional 1.6 percentage points of pay and a total of 3.2% higher than 2011-12; and
Parliamentary-Under Secretaries, the Government Whips and Opposition Whips will pay an additional 1 percentage point of pay and a total of 2% higher than 2011-12.
In line with other public service schemes, a further consultation will take place on the contribution increases for members of the ministerial pension scheme in 2014-15. Before these increases are implemented, I will consider any evidence of opt-outs from the scheme in line with the Government’s commitment given by the Chief Secretary to the Treasury.
Ministers in the House of Commons make separate contributions towards their pensions as Members of Parliament. Responsibility for the setting of pension provision for MPs is the responsibility of the Independent Parliamentary Standards Authority.
The details of the new scheme have been laid before the House, along with a copy of the response to the consultation from the Chairman of the Parliamentary Contributory Pension Fund Trustees.
1Independent Public Service Pensions Commission: Interim Report 7 October 2010. http://www.hm-treasury.gov.uk/d/hutton_pensions.htm chapter 8.