MPs, Ministers and office holders belonging to the Parliamentary Contributory Pension Fund (PCPF) could be forced to work for an extra three years, with recommendations from the Review Body on Senior Salaries increasing the retirement age from 65 to 68.

Following a Government request to carry out a fundamental review of the PCPF and to recommend sustainable pension arrangements that are fair to both the members and the taxpayer, the Review also proposes retaining the defined benefit (DB) scheme but based on career average revalued earnings.

This scheme would apply immediately after the next election to all MPs, Ministers and office holders, although current MPs would have their service to date preserved and uprated in future by the retail prices index, and retain the current retirement age of 65.

Another reason for the review grew from figures from the Government Actuary that found at 1 April 2008 that unless member contributions were increased or benefits reduced, the cost to the Exchequer of the scheme would rise from 18.3 per cent in 2007, to 23.1 per cent.

The recommendations from the Review Board would see all MPs start to accrue at 1/60ths and pay contributions of 5.5 per cent of salary, a change from the options of 1/40th, 1/50th or 1/60th accruals, with 11.9 per cent, 7.9 per cent and 5.9 per cent respectively that currently stand.

The Exchequer contribution would initially be 10.5 per cent of payroll, but could vary by up to five per cent either side of that. Currently this stands at 20.0 per cent of payroll.

Share Story: