Constitutional Reform and Governance Bill

House of Commons

Session 2009 - 10
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Constitutional Reform and Governance Bill

Constitutional Reform and Governance Bill
Schedule 7 — Parliamentary and other pensions
Part 1 — Parliamentary and other pensions
78

Schedule 7
Section 50

Parliamentary and other pensions
Part 1
Parliamentary and other pensions
The Parliamentary Contributory Pension Fund
5
Continuance of Fund
1     (1)
There is to continue to be a fund known as the Parliamentary Contributory
Pension Fund (“the Fund”).
      (2)
The persons who are the trustees of the Fund immediately before this
paragraph comes into force are to continue as the trustees of the Fund
10
(subject to provision made by or under this Schedule).
      (3)
The IPSA may, after consulting the Minister for the Civil Service—
(a)
remove a trustee of the Fund;
(b)
fill any vacancy in the trustees;
(c)
appoint additional trustees.
15
      (4)
The power conferred by sub-paragraph (3) is subject to any provision in a
scheme under paragraph 3.
Powers of trustees
2     (1)
The trustees of the Fund may invest the assets of the Fund, whether at the
time in a state of investment or not, in any investment whatever and may
20
also from time to time vary any such investments.
      (2)
The trustees of the Fund may settle or compromise any claim or dispute
relating to the Fund, but—
(a)
so far as the claim or dispute relates to a scheme under paragraph 3
or 7, they may do so only with the consent of the IPSA, and
25
(b)
so far as the claim or dispute relates to a scheme under paragraph 11,
they may do so only with the consent of the Minister for the Civil
Service.
      (3)
The IPSA must consult the Minister for the Civil Service before giving its
consent to the settlement or compromise of a claim or dispute relating to a
30
scheme under paragraph 3.
      (4)
Section 35(1) to (4) of the Pensions Act 1995 (c. 26) (pension scheme trustees
must prepare statement of investment principles) applies to the trustees of
the Fund despite any provision in regulations under section 35 of that Act
which would (apart from this sub-paragraph) prevent it applying.
35
      (5)
Any provision in regulations under that section which would require the
trustees of the Fund to consult the employer applies as if it required them to
consult the IPSA and the Minister for the Civil Service.
Administration scheme
3     (1)
The IPSA may make a scheme containing provision about—
40

Constitutional Reform and Governance Bill
Schedule 7 — Parliamentary and other pensions
Part 1 — Parliamentary and other pensions
79

(a)
the administration of the Fund,
(b)
the management of the Fund’s assets,
(c)
the number, qualification and proceedings of the trustees of the
Fund, and
(d)
the application of the Fund’s assets in connection with the matters in
5
paragraphs (a) to (c).
      (2)
A scheme under this paragraph may in particular—
(a)
include any or all of the provisions specified in paragraphs 26 to 28,
(b)
make different provision in relation to different cases, circumstances
or persons,
10
(c)
make such incidental, consequential and transitional provision
(other than provision modifying an enactment or subordinate
legislation) as the IPSA considers appropriate.
      (3)
In sub-paragraph (2)(c) the reference to subordinate legislation does not
include a scheme under this paragraph.
15
      (4)
No provision of a scheme under this paragraph is to be construed as
restricting the powers of the trustees under paragraph 2(1).
Procedure for administration scheme
4     (1)
Before making a scheme under paragraph 3 the IPSA must consult—
(a)
the Treasury,
20
(b)
the Minister for the Civil Service,
(c)
the trustees of the Fund,
(d)
persons the IPSA considers to represent those likely to be affected by
the scheme, and
(e)
any other person the IPSA considers appropriate.
25
      (2)
The IPSA must send to the Speaker of the House of Commons for laying
before the House of Commons—
(a)
any representations made to it by the trustees of the Fund in
response to consultation under this paragraph,
(b)
any scheme made by it under paragraph 3, and
30
(c)
a statement of the reasons for making the scheme.
      (3)
When the scheme and the statement of reasons have been laid, the IPSA
must publish them in a way it considers appropriate.
Exchequer contribution to Fund
5     (1)
In respect of each financial year an Exchequer contribution is to be paid into
35
the Fund out of money provided by Parliament.
      (2)
Subject to any provision made by the IPSA under paragraph 6, the amount
of the contribution for any financial year is to be calculated in accordance
with recommendations for that year contained in a report made by the
Government Actuary under this paragraph.
40
      (3)
The Government Actuary must make a report under this paragraph as soon
as practicable after the beginning of—
(a)
the period of three years beginning with the relevant date, and
(b)
each succeeding period of three years.

Constitutional Reform and Governance Bill
Schedule 7 — Parliamentary and other pensions
Part 1 — Parliamentary and other pensions
80

      (4)
The “relevant date” means the date immediately following the end of the
three year period which is current for the purposes of section 3 of the
Parliamentary and other Pensions Act 1987 (c. 45) when this paragraph
comes into force.
      (5)
The report is to be made to—
5
(a)
the trustees of the Fund,
(b)
the IPSA,
(c)
the Minister for the Civil Service, and
(d)
the Treasury.
      (6)
The report must—
10
(a)
report on the general financial position of the Fund at the beginning
of the period of three years in which the report is made, and
(b)
make a recommendation as to the rate at which (subject to any
subsequent report under this paragraph) Exchequer contributions
should be paid into the Fund in respect of any financial year
15
beginning after the report is made.
      (7)
The rate is to be expressed by reference to such matters as the Government
Actuary considers appropriate.
      (8)
A copy of every report made by the Government Actuary under this
paragraph is to be laid before the House of Commons.
20
Power to determine Exchequer contribution
6     (1)
The IPSA may, with the consent of the Treasury and the Minister for the
Civil Service, make provision for determining the Exchequer contribution in
respect of any financial year.
      (2)
The “Exchequer contribution” means the amount to be paid into the Fund
25
under paragraph 5.
      (3)
Before making provision under this paragraph the IPSA must consult—
(a)
the trustees of the Fund, and
(b)
persons appearing to the IPSA to represent persons likely to be
affected by the provision.
30
      (4)
The IPSA must send to the Speaker of the House of Commons for laying
before the House of Commons—
(a)
any representations made by the trustees of the Fund in response to
consultation under this paragraph,
(b)
any provision made by the IPSA under this paragraph, and
35
(c)
a statement of the reasons for making the provision.
      (5)
When the provision and the statement of reasons have been laid, the IPSA
must publish them in a way it considers appropriate.
      (6)
Provision under this section may—
(a)
apply to a financial year which has already ended or which has
40
begun before the making of the provision, and
(b)
make such incidental, consequential and transitional provision
(other than provision modifying an enactment or subordinate
legislation) as the IPSA considers appropriate.

Constitutional Reform and Governance Bill
Schedule 7 — Parliamentary and other pensions
Part 1 — Parliamentary and other pensions
81

MPs’ pension scheme
MPs’ pension scheme
7     (1)
The IPSA may make a scheme containing provision about the application of
the assets of the Fund in or towards the provision of pensions for or in
respect of persons with service as a member of the House of Commons, in
5
respect of that service.
      (2)
A scheme under this paragraph may not provide for the application of any
of the assets of the Fund in or towards the provision of pensions for or in
respect of persons with service as Lord Chancellor.
      (3)
A scheme under this paragraph may not provide for the application of any
10
of the assets of the Fund in or towards the provision of pensions for or in
respect of a person (“P”) with service as—
(a)
Prime Minister and First Lord of the Treasury, or
(b)
Speaker of the House of Commons.
      (4)
Sub-paragraph (3) does not apply if P elects, in accordance with provision
15
made by the scheme, to contribute to the Fund out of P’s salary as a member
of the House of Commons while holding the office of Prime Minister and
First Lord of the Treasury or Speaker of the House of Commons.
      (5)
The provision mentioned in sub-paragraph (4) may not provide for a
pension payable under the scheme for or in respect of P to be calculated by
20
reference to service as a member of the House of Commons before 28
February 1991.
Meaning of “service as a member of the House of Commons”
8     (1)
For the purposes of this Schedule a person is to be treated as a member of the
House of Commons at any time if at that time a salary is or was payable to
25
the person under—
(a)
section 4 of the Parliamentary Standards Act 2009 (c. 13), or
(b)
in relation to a time before that section was in force, the resolutions
of the House of Commons then in force relating to the remuneration
of its members.
30
      (2)
For the purposes of this Schedule service as a member of the House of
Commons includes service as the holder of a qualifying office or position.
      (3)
In relation to a time when a determination under section 4(4) of the
Parliamentary Standards Act 2009 is in effect a “qualifying office or position”
means an office or position in respect of which, because of section 4A(2) of
35
that Act, a higher salary is payable than the salary payable to members of the
House of Commons generally.
      (4)
In relation to a time before the first determination under section 4(4) of the
Parliamentary Standards Act 2009 comes into effect a “qualifying office or
position” means—
40
(a)
the office of Chairman of Ways and Means and the office of Deputy
Chairman of Ways and Means,
(b)
an office or position in respect of which, under the resolutions of the
House of Commons then in force relating to the remuneration of its

Constitutional Reform and Governance Bill
Schedule 7 — Parliamentary and other pensions
Part 1 — Parliamentary and other pensions
82

members, a higher salary was payable than the salary payable to
members of the House of Commons generally.
MPs’ pension scheme: further provision
9     (1)
A scheme under paragraph 7 may in particular—
(a)
include any or all of the provisions specified in paragraphs 19 to 27,
5
except for the provision specified in paragraph 24(2),
(b)
make provision which has effect from a date earlier than the date the
scheme is made,
(c)
make provision in relation to service before the passing of this Act,
(d)
make different provision in relation to different cases, circumstances
10
or persons, and
(e)
make such incidental, consequential and transitional provision
(other than provision modifying an enactment or subordinate
legislation) as the IPSA considers appropriate.
      (2)
In sub-paragraph (1)(e) the reference to subordinate legislation does not
15
include a scheme under paragraph 7.
Procedure for MPs’ pension scheme
10    (1)
Before making a scheme under paragraph 7 the IPSA must consult—
(a)
the Treasury,
(b)
the Minister for the Civil Service,
20
(c)
the trustees of the Fund,
(d)
persons the IPSA considers to represent those likely to be affected by
the scheme,
(e)
the Government Actuary,
(f)
the Review Body on Senior Salaries, and
25
(g)
any other person the IPSA considers appropriate.
      (2)
The IPSA must send to the Speaker of the House of Commons for laying
before the House of Commons—
(a)
any representations made to it by the trustees of the Fund in
response to consultation under this paragraph,
30
(b)
any scheme made by it under paragraph 7, and
(c)
a statement of the reasons for making the scheme.
      (3)
When the scheme and the statement of reasons have been laid, the IPSA
must publish them in a way it considers appropriate.
      (4)
The reference in sub-paragraph (1)(f) to the Review Body on Senior
35
Salaries—
(a)
if the name of the body is changed, is to be treated as a reference to
the body by its new name, and
(b)
if the functions of the body (or substantially corresponding
functions) become functions of a different body, is to be treated as a
40
reference to the body by which those functions are exercisable.
      (5)
Any question arising under sub-paragraph (4) is to be determined by the
Speaker of the House of Commons.

Constitutional Reform and Governance Bill
Schedule 7 — Parliamentary and other pensions
Part 1 — Parliamentary and other pensions
83

Ministers’ etc pension scheme
Ministers’ etc pension scheme
11    (1)
The Minister for the Civil Service may make a scheme containing provision
about the application of the assets of the Fund in or towards the provision of
pensions for or in respect of persons with service to which this paragraph
5
applies, in respect of that service.
      (2)
This paragraph applies to service as—
(a)
the holder of an office specified in Parts 1 to 4 of Schedule 1 to the
Ministerial and other Salaries Act 1975 (c. 27) (ministerial offices),
(b)
the holder of an office specified in Part 1 of Schedule 2 to that Act
10
(Opposition leaders and whips),
(c)
Speaker of the House of Lords,
(d)
Chairman of Committees of the House of Lords,
(e)
Deputy Chairman of Committees of the House of Lords.
      (3)
A scheme under this paragraph may not provide for the application of any
15
of the assets of the Fund in or towards the provision of pensions for or in
respect of a person with service as—
(a)
Lord Chancellor,
(b)
Prime Minister and First Lord of the Treasury, or
(c)
Speaker of the House of Commons.
20
Ministers’ etc pension scheme: further provision
12    (1)
A scheme under paragraph 11 may in particular—
(a)
include any or all of the provisions specified in paragraphs 19 to 27
and 29,
(b)
make provision which has effect from a date earlier than the date the
25
scheme is made,
(c)
make provision in relation to service before the passing of this Act
(including, in relation to service within paragraph 11(2)(a) or (b),
service before the passing of the Ministerial and other Salaries Act
1975),
30
(d)
make different provision in relation to different cases, circumstances
or persons, and
(e)
make such incidental, consequential and transitional provision
(other than provision modifying an enactment or subordinate
legislation) as the Minister considers appropriate.
35
      (2)
In sub-paragraph (1)(e) the reference to subordinate legislation does not
include a scheme under paragraph 11.
Procedure for Ministers’ etc pension scheme
13    (1)
Before making a scheme under paragraph 11 the Minister for the Civil
Service must consult—
40
(a)
the IPSA,
(b)
the Government Actuary,
(c)
the trustees of the Fund, and
(d)
any other person the Minister considers appropriate.

Constitutional Reform and Governance Bill
Schedule 7 — Parliamentary and other pensions
Part 1 — Parliamentary and other pensions
84

      (2)
The Minister for the Civil Service must lay before the House of Commons—
(a)
any representations made to the Minister by the trustees of the Fund
in response to consultation under this paragraph,
(b)
any scheme made by the Minister under paragraph 11, and
(c)
a statement of the reasons for making the scheme.
5
      (3)
When the scheme and the statement of reasons have been laid, the Minister
must publish them in a way the Minister considers appropriate.
Supplementary provision
Protection of accrued rights
14    (1)
This paragraph applies where—
10
(a)
the IPSA makes a scheme under paragraph 7, or
(b)
the Minister for the Civil Service makes a scheme under paragraph
11,

(the “new scheme”).
      (2)
The new scheme must not make any provision in relation to an accrued right
15
which puts a person in a worse position than the person would have been in
apart from the provision.
      (3)
Sub-paragraph (2) does not apply if the person making the new scheme is
satisfied that—
(a)
the person (“P”) in respect of whose service the right has accrued (or
20
will have accrued by the time the provision comes into force) is in
service when the new scheme is made, or
(b)
the new scheme gives P (or a person acting on P’s behalf) the
opportunity to opt for the accrued right to remain unaffected by the
provision.
25
      (4)
If P has died, the references in sub-paragraph (3)(b) to P are to be read as
references to the persons who because of the accrued right are entitled, or
may become entitled, to a pension or to the benefit of any pension.
      (5)
In sub-paragraph (3)(a) “service” means—
(a)
where the new scheme is a scheme under paragraph 7, service as a
30
member of the House of Commons, and
(b)
where the new scheme is a scheme under paragraph 11, service to
which that paragraph applies.
Meaning of “accrued right”
15    (1)
This paragraph applies for the interpretation of paragraph 14.
35
      (2)
“Accrued right”, in relation to the new scheme, means so much of any right
or entitlement to or in respect of a pension payable out of the Fund as—
(a)
has accrued under the existing scheme in respect of service which
was before the making of the new scheme, or
(b)
by the time the new scheme comes into force, will have accrued
40
under the existing scheme in respect of service of a person within
sub-paragraph (3).