THE pension scheme for members of Parliament is too generous, a Bristol MP claims.
Pensions Minister Steve Webb believes members of parliament should be forced to pay higher contributions.
Under the current system, backbenchers can retire after 20 years’ service with an index-linked pension of half their £65,000-a-year annual salary.
They put in just over 11 per cent of their pay, while the taxpayer contributes 25 per cent — making it far more attractive than most public and private sector schemes.
But moves to reform the system and bring it in line with those used by normal members of the public have to date floundered on the fact that some MPs are keen to preserve their perk and have resisted calls for change.
Asked by a Sunday newspaper whether they should be forced to make higher contributions, Thornbury and Yate Webb said: “Absolutely. Unreservedly so.”
The Independent Parliamentary Standards Authority (IPSA) is considering how the parliamentary pension scheme should be reformed.
Mr Webb hinted that MPs should not be spared from having to put more into their pension pots in the same way as other public sector workers. He added that the age at which MPs qualified for their pensions should also be raised.
“IPSA will make the decision, but I know what I think. It’s clear where we should end up. It would look very odd if we insulated ourselves,” he said.
In a wide-ranging interview, the minister of state, who works closely with Iain Duncan Smith, emphasised the government’s also wanted to be fairer to women when it comes to pensions.
Many women lose out because of the career breaks they take to have children, meaning they do not qualify for earnings-related top-ups.
On average, women receive about £130 a week, compared with £160 a week for men. Ministers plan to tackle this problem by introducing a flat rate for both sexes.
Mr Webb also said that a solution would be found to the row about 33,000 women in their late fifties who face having to work an extra two years to qualify for pensions when the state retirement age for women rises from 60 to 65 by 2018, part of the process of equalising it.
“We do recognise that there is a particular group most affected, and we are willing to work to get the transition right,” he said.
On the controversial proposal to cap at £26,000 the amount of benefit any individual can receive, Webb said he supported the changes, but called for some flexibility over the cap.