This note provides an overview of the MPs' Pension Scheme and reforms introduced from May 2015. Further detail on the background can be found in SN 01844 MPs Pension Scheme - backgroundJump to full report >>
The Parliamentary Contributory Pension Fund (PCPF) is made up of the MPs’ Pension Scheme and the Ministers’ Pension Scheme. It is a funded defined benefit (DB) pension scheme, managed by Trustees in line with scheme rules and any relevant legislation. It is contracted-out of the additional State Pension. The Independent Parliamentary Standards Authority (IPSA) is responsible for oversight of the MP’s scheme; the Minister for the Civil Service for the Ministers’ scheme.
On 11 July 2013, IPSA launched a consultation on a reform package for MPs pay and pensions. For pensions, its proposed reforms were in line with those for other public service schemes: a new scheme would be introduced from 2015, providing benefits based on Career Average Revalued Earnings (CARE) rather than final salary; individuals would have a normal pension age linked to their State Pension age; and there would be protection for those closest to retirement. In its Final Report on MPs’ Pay and Pensions published in December 2013, IPSA said it would proceed broadly as announced in July. One exception was that the share of the cost of accruing benefits to be met by MPs would increase to 46%, compared to the 40% originally proposed. This was in order to ensure that the overall remuneration package was cost-neutral.
Accordingly, after the 2015 General Election, a new CARE section of the MPs Pension Scheme was introduced. MPs elected in 2015 automatically became members of this section unless they had previously opted out or were covered by transitional protection in the Final Salary Section.
Detailed information – including scheme guides, rules and annual reports - is on the Parliamentary Contributory Pension Fund website.
This note provides an overview of MPs’ pensions and recent reforms. The background is covered in more detail in Library Briefing Paper SN01844 MPs’ Pension Scheme - background (May 2013). HUPensions of ministers and senior office holdersUH are covered in a separate note.