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Welfare Reform on the Web (October 2010): Pensions - UK

Postwar passions to bring big spike in retirements in 2012

P. Inman

The Guardian, Sept. 22nd 2010, p.4

Figures from the Department of Work and Pensions show the number of people reaching retirement age in 2012 will rise by 150,000, due to a the high number of babies born in 1946-7. Pensions minister Steve Webb has said the state pension bill will increase by 4bn as a result.

Review of the Parliamentary Contributory Pension Fund 2010

Review Body on Senior Salaries

London: TSO, 2010 (Cm 7926)

The Parliamentary Contributory Pension Fund (PCPF) is a funded pension scheme which pays a defined benefit pension based on final salary. Members of the scheme and the Exchequer pay contributions to the PCPF which are used to build up assets to pay pensions at the specified level to members during their retirement. This review of the PCPF recommends pension arrangements that are sustainable, appropriate to the members' circumstances and fair to both them and the taxpayer. It considers that the best balance between the conflicting pressures of reducing the taxpayer contribution to the PCPF and securing adequate and sustainable pensions for MPs would be achieved by retaining a defined benefit scheme, but based on career average revalued earnings and with a higher retirement age. It recommends that members' retirement age should be set at 68 and that their contribution rate be set initially at 5.5% of payroll.

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