Written question asked by David Laws (Liberal Democrat) on Monday, 18 June 2007, in the House of Commons. It was due for an answer on Wednesday, 20 June 2007. It was answered by Jack Straw (Labour) on Monday, 25 June 2007 on behalf of the Leader of the House of Commons.

Departments: Pensions

Question: To ask the Leader of the House what the rate of employer contributions to the Parliamentary Contributory Pension Scheme is for 2007-08; what savings he estimates would result from capping the rate to 14 per cent. for each year from 2007-08 to 2020-22; and if he will make a statement.

Answer: I refer the hon. Member to the answer I gave to him on 30 October 2006, Official Report, columns 20-21W.Limiting the Exchequer contribution to 14 per cent. would, if the actuarial valuation assumptions are borne out in practice, reduce the contribution by 12.8 per cent. of pensionable pay for the period up to 2020-21. Based on an estimated total pensionable pay for 2007-08 of £44.5 million, reducing the Exchequer contribution to 14 per cent. would represent a £5.7 million per annum saving.The PCPF is a ““balance of cost”” scheme whereby the Exchequer makes up the balance of cost after taking account of pension benefits and payments, Member contributions and investment returns. Reducing the Exchequer contributions until 2020-21 would increase the level of deficit, which would eventually need to be paid by the Exchequer or by increasing Member contributions, reducing the level of pension benefits or a combination of these.

Secondary information