MPs increase their pension accrual rate

Days
after Alan Pickering’s report on pension simplification raised the possibility
of allowing employers to cut back pension benefits, MPs have increased their
pension accrual rate by 25 per cent.

Tim
Webb, a divisional director at pensions consultancy Gissings, is astonished MPs
have taken the decision.

"It’s
clear MPs have no understanding of the pension issues currently facing
employers and employees throughout the country. To increase the rate of accrual
of the benefit under their final pay plan from 1/50th of the salary for each
year of service to 1/40th (a 25 per cent increase) at this time defies
belief."

"Clearly
this action proves MPs think they should not be encumbered by the problems
other employees face. Fortunately for them, their employer does not sell a
product or service and does not have to consider the price its customers can
afford."

Webb
said the decision to increase MP pensions was ‘slipped out’ in a written
parliamentary answer on the same day as Gordon Brown’s three-year spending
review. He calls the timing ‘interesting’ considering the Prime Minister’s
comment on Tuesday that government spin is a thing of the past.

"We
would all dearly love pensions of the quality that MPs currently receive and we
would all love the rate of accrual of pension to be improved just because
people are staying less with the same ’employer’. Unfortunately, the vast
majority of us live in the real world," he said.

By Ben Willmott

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