Written question asked by David Laws (Liberal Democrat) on Tuesday, 8 January 2008, in the House of Commons. It was due for an answer on Thursday, 10 January 2008. It was answered by Helen Goodman (Labour) on Wednesday, 16 January 2008 on behalf of the Leader of the House of Commons.

Members: Pensions

Question: To ask the Leader of the House what estimate she has made of the required rate of employer contribution to the pension scheme of hon. Members using the FRS 17 accounting standard to assess the costs of that scheme; and if she will make a statement.

Answer: None. The Resource Accounts and actuarial valuation use different measures of the cost to the Exchequer of providing benefits under the PCPF because they are used for different purposes and use different assumptions about investment returns.The FRS 17 is an accounting standard used in reporting the liabilities and assets of the PCPF in the House of Commons Members Resource Accounts (HC 832). The Resource Accounts use the return on corporate bonds for the valuation of accrued liabilities and current service costs. The standard is a financial reporting standard and is not the appropriate tool for setting the level of employer contribution for the PCPF.The assessment of the required rate of employer contribution for the Parliamentary Contributory Pension Fund is made by the Government Actuary's Department every three years using a standard methodology which includes an assessment of the expected rate of return of the Fund's assets. This approach is widely used in the private and public sectors. The last actuarial review in 2005 assessed the underlying rate of employer contribution at 18.1 per cent. of Members' salaries with a further 8.7 per cent. required to make good the current deficit. The next actuarial review was agreed by the Trustees at their last meeting and any revision to the current employer contribution rate will come into effect from 2009.

Secondary information