Taxpayers meet MPs' pension shortfall
dinosaur | 25.03.2003 17:12
I don't really want to disrupt the flow of reports of inspiring anti-war protests.. but I really think people should see this report from the BBC:
Taxpayers will be contributing an extra £25m over the next three years to make up the shortfall in the pension fund for MPs.
As with hundreds of company pension schemes the drop in the stock market has blown a hole in the fund and it needs to be filled up.
But instead of the scheme members paying extra, the Treasury is to treble payments to the Parliamentary Pension Scheme from 8% to 24% of MPs salaries to meet the gap.
Steve Webb, the Liberal Democrats work and pensions spokesman, said the move "does not look right" at a time when constituents' private pensions are doing so badly.
Ben Bradshaw, the Commons deputy leader, said part of the rise in contributions was necessary to meet a deficit in the Parliamentary Pension Scheme of £25m.
Last summer MPs voted themselves an enhanced pension deal, with a rise from one fiftieth to one fortieth of their annual £55,000 salary to be paid per year of service.
Objections
They argued that the precarious nature of the average Parliamentary career means they deserve a better pension deal.
Mr Webb said the MPs pension fund had suffered in the same way as everybody else's fund, with surpluses in the 1990s, followed by a "holiday" or cut in taxpayers' contributions.
"What was announced yesterday is over and above that rise, because the fund is now in deficit, extra taxpayers' money is going in - and that is really the part that I, as an individual, object to," he told BBC Radio 4's Today programme.
Webb: Objects to taxpayers meeting deficit
"I think that we as MPs should have no better, no worse position when this sort of thing happens, as our constituents in private sector funds.
"What's happening to them is that in some cases, workers are having to put more in or are seeing their benefits reduced as well as employers putting more money in.
"What's happening for us is the whole of the amount of the shortfall is being met by the taxpayer.
"All I am saying is, at a time when our own constituents' pension funds - particularly in the private sector - are doing very, very badly and Parliament arguably has failed to address that problem urgently enough, it simply doesn't look right for us to expect the taxpayer to meet all of our deficit without us putting anything extra in at all."
Mr Webb said he believed the government was concerned that the MPs "wouldn't wear" being asked to make up the full cost themselves.
"I think the same thing has happened again this year," he said.
David Willetts, shadow work and pensions secretary, said: "The fund is mirroring the experience of many funded pension schemes, which are seeing increased contributions to make up for the cost of the Chancellor's £5bn a year tax imposed on pension funds in 1997 through the abolition of the dividend tax."
As with hundreds of company pension schemes the drop in the stock market has blown a hole in the fund and it needs to be filled up.
But instead of the scheme members paying extra, the Treasury is to treble payments to the Parliamentary Pension Scheme from 8% to 24% of MPs salaries to meet the gap.
Steve Webb, the Liberal Democrats work and pensions spokesman, said the move "does not look right" at a time when constituents' private pensions are doing so badly.
Ben Bradshaw, the Commons deputy leader, said part of the rise in contributions was necessary to meet a deficit in the Parliamentary Pension Scheme of £25m.
Last summer MPs voted themselves an enhanced pension deal, with a rise from one fiftieth to one fortieth of their annual £55,000 salary to be paid per year of service.
Objections
They argued that the precarious nature of the average Parliamentary career means they deserve a better pension deal.
Mr Webb said the MPs pension fund had suffered in the same way as everybody else's fund, with surpluses in the 1990s, followed by a "holiday" or cut in taxpayers' contributions.
"What was announced yesterday is over and above that rise, because the fund is now in deficit, extra taxpayers' money is going in - and that is really the part that I, as an individual, object to," he told BBC Radio 4's Today programme.
Webb: Objects to taxpayers meeting deficit
"I think that we as MPs should have no better, no worse position when this sort of thing happens, as our constituents in private sector funds.
"What's happening to them is that in some cases, workers are having to put more in or are seeing their benefits reduced as well as employers putting more money in.
"What's happening for us is the whole of the amount of the shortfall is being met by the taxpayer.
"All I am saying is, at a time when our own constituents' pension funds - particularly in the private sector - are doing very, very badly and Parliament arguably has failed to address that problem urgently enough, it simply doesn't look right for us to expect the taxpayer to meet all of our deficit without us putting anything extra in at all."
Mr Webb said he believed the government was concerned that the MPs "wouldn't wear" being asked to make up the full cost themselves.
"I think the same thing has happened again this year," he said.
David Willetts, shadow work and pensions secretary, said: "The fund is mirroring the experience of many funded pension schemes, which are seeing increased contributions to make up for the cost of the Chancellor's £5bn a year tax imposed on pension funds in 1997 through the abolition of the dividend tax."
dinosaur