APPENDIX A
Summary of the Main Provisions of the
Scheme
1. All serving Members of Parliament may
participate in the Parliamentary Contributory Pension Fund. Ministers
and certain other office holders (in both the House of Lords and
House of Commons) may participate in a supplementary section of
the scheme and qualify for a supplementary pension on a similar
basis to MPs, except that benefits accrue by reference to salary
in each year of office holder membership, rather than by reference
to final pay.
2. Contributions are required at a rate
of 10% of salary from scheme members. Pensions accrue at the rate
of 1/40th of final pensionable salary per year of reckonable service.
Exchequer contributions are paid at a rate recommended from time
to time by the Government Actuary.
3. Members may instead opt to pay contributions
at a rate of 6% of salary and to accrue pension at the rate of
1/50th of final pensionable salary per year of reckonable service.
Serving members who have reached the limits for maximum benefit
accrual in the scheme do not pay contributions.
4. Retirement pensions are payable from
age 65 to those who are no longer MPs or office holders. Pensions
may be paid before age 65 in the following circumstances, though
only service up to the later of 1 April 2009 and the next General
Election after 5 May 2005 will count towards the qualifying period:
- Full accrued pensions may be paid from age 60
where service as a member exceeds 20 years, and from an age between
60 and 65 where service is between 20 and 15 years
- Abated pensions may be payable from earlier ages
to members aged 50 or over
5. An ill-health retirement pension may,
subject to medical evidence, be awarded at any age. Ill-health
pensions are calculated by reference to potential service to age
65.
6. Members may, on retirement, commute part
of their pension for a lump sum that is actuarially equivalent
to the part of the pension forgone.
7. Pensions are also payable to spouses
and other qualifying partners of deceased scheme members at the
rate of five-eighths of the deceased member's pension. Children's
pensions are also payable. In the case of members who die in service,
the spouse's or partner's pension is based on the pension that
would have been payable to the member had ill-health retirement
taken place at the date of death. On death in service, a member's
salary continues to be paid to a surviving spouse or partner for
a further three months. A lump sum equal to four times pensionable
salary is also paid on the death in service of a scheme member.
8. Pensions and deferred pensions are increased
annually in line with price inflation.
9. The scheme is contracted out of the earnings-related
additional pension of the State Pension Scheme.
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