Memorandum submitted by the Royal Mint
Q66. Your Committee asked for a note explaining
the 2005-06 increase in pension costs incurred by the Royal Mint.[4]
In 2005-06 employees contributions of £3.125
million were paid to the Principal Civil Service Pension Scheme
at rates of 16.2% to 24.6% of pensionable pay based on salary
bands.[5]
In the previous year employees contributions of £2.237 million
were paid at rates of 12.0% to 18.5% of pensionable pay based
on salary bands.[6]
The Cabinet Office by way of a "Employer
Pensions Notice" advises the pension rates that are applied.
The change of rates applying to 2005-06 represents an underlying
increase in pension costs of 34% compared to 2004-05:
| £000's |
| Pension costs 2004-05[7]
| 2,237 |
| Percentage increase in wages and salaries applied to 2004-05 pension costs—2.53%[8]
| 57 |
| Sub total | 2,294 |
| Increase in pension rates—34% | 780
|
| Sub total | 3,074 |
| Other factors (change in mix of salary bands)
| 52 |
| Total | 3,126 |
Q62. I promised to provide in confidence to your
Committee details about the Royal Mint's bonus scheme when it
was put in place.[9]
As I indicated to your Committee (Questions 58 to 61),I felt
uncomfortable at setting targets for a 2006-07 bonus scheme because
they would be so dependent on the success of the various improvement
programmes I have put in place. The Royal Mint's Remuneration
Committee met on 6 November and endorsed this position. Therefore,
there will be no bonus scheme for Directors for 2006-07. The Remuneration
Committee agreed to review the position again in March next year
with a view to introducing a new bonus scheme for 2007-08. I will
update your Committee on progress at that time.
However, given your Committee's interest in the subject,
it might be helpful if I describe in more detail the bonus scheme
that operated for 2005-06. As I advised your Committee (Question
60) no payments were made under the terms of this bonus scheme.
As noted in our 2005-06 Accounts the bonus scheme (or "Short-Term
Incentive Plan—STIP") applied to Executive Directors
and other key managers. Cash awards of up to 20% (30% for the
Chief Executive) were payable to participants dependent upon the
achievement of corporate and individual performance targets, such
achievement to be agreed by the Remuneration Committee. The corporate
and individual targets which applied to Executive Directors are
summarised in the attached annex. [10]
November 2006
Band 1 (£17,000 and under) 16.2%
Band 2 (£17,001 to £35,000) 18.6%
Band 3 (£35,001 to £60,500) 22.3%
Band 4 (£65,50 and over) 24.6%.
Band 2 (£17,001 to £36,000) 13.5%
Band 3 (£36,001 to £62,000) 16.5%
Band 4 (£62,001 and over) 18.5%.
4
Ev 8 Back
5
See Note 13 to 2005-06 Accounts. Back
6
Band 1 (£17,000 and under) 12.0% Back
7
See Note 13 to 2005-06 Accounts. Back
8
See Note 5 to 2005-06 Accounts. Wages and salaries £20,802,000
(2005-06) and £20,920,000 (2004-05). Back
9
Ev 8 Back
10
Not printed Back
| 
