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Report by year end on MP pensions | |
(30 minutes later) | |
A review of MPs' pensions - which could see them lose their final salary scheme - is to report by the end of the year. | |
The review, by the Senior Salaries Review Body, was ordered by Prime Minister Gordon Brown after concerns about the growing cost to taxpayers. | |
Alternatives being looked at to reduce the cost to the Treasury of the current scheme are "defined contribution or money purchase arrangements". | Alternatives being looked at to reduce the cost to the Treasury of the current scheme are "defined contribution or money purchase arrangements". |
The Conservatives and the Lib Dems both want the final salary scheme closed. | |
MPs have already backed changes which cut the contribution to their pension from taxpayers by 2.9% or £1.4m a year. | MPs have already backed changes which cut the contribution to their pension from taxpayers by 2.9% or £1.4m a year. |
But Commons leader Harriet Harman said any further changes would be put on hold until the review body made its recommendations. | |
"The government's decision on any further proposals will be taken after the publication of the review," she said in a statement. | |
Mr Brown ordered the review in February to look at ways of reducing the £12m a year cost to taxpayers of the MPs' pension scheme. | |
A review proposed in January 2008 was put off by MPs, who voted to delay the inquiry until the cost of pensions hit 20% of their total payroll, which is around £130m. | |
The review was triggered when the Government Actuary's Department warned the prime minister that the 20% threshold was likely to be breached. | |
The cost to the Treasury of MPs' pensions has risen from £9.8m in 2003 to £12m last year. Over that period, MPs themselves were asked to contribute only an extra £700,000. | |
MPs' contributions to their pension scheme are set at 10% of their salary and the current "accrual rate" - the proportion of salary received for each year of service - is 1/40th. |