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| Version 1 | Version 2 |
|---|---|
| Report by year end on MP pensions | Report by year end on MP pensions |
| (20 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. | 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. | 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. | 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. |
| Deficit | |
| But Commons leader Harriet Harman said any further changes would be put on hold until the review body made its recommendations. | 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. | "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. | 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. | 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. |
| In June of that year, the Government Actuary Department warned that the 20% limit would be breached, triggering a fundamental review of the entire pension scheme. | |
| Government actuaries later warned that because of a £50.9m deficit in the scheme, taxpayer contributions would have to rise to 31.6% of salary from 1 April 2009. | |
| But in June this year, MPs voted to increase the amount MPs pay into the scheme and to cap taxpayer contributions at the 2008/09 level of 26.8% for 2009/10. | |
| 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 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. | 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. |
| Currently, MPs with 20 years' service can retire on a pension of £30,000 a year. The average private sector pension is about £25,000. |