MSPs to be asked if they want better pension plans

MSPs are to be asked if they want more generous pension arrangements - and, if so, who should pay for them.

They are also to consider whether restrictions should be placed on pensions for First Ministers and Presiding Officers by linking these to length of service.

The questions are set out in a consultation paper published yesterday by a Holyrood committee created to recommend a replacement pension scheme.

MSPs themselves will have the final say on their pension arrangements after the consultation period has ended.

At present, MSPs' pensions are based on one 50th of their final salary for each year of service and a 6 per cent contribution rate. Westminster and the Welsh Assembly politicians can choose between one 40th of final salary and a 10 per cent contribution rate, or one 50th and a 6 per cent rate.

Nearly all choose the one 40th option and the consultation paper asks MSPs if this option should apply to them. It also asks: "Who should pay the additional costs involved?"

Unlike most public service pension schemes, Holyrood's is "funded", with MSPs' contributions going in paying for the pensions going out.

But this does not apply to pensions paid to First Ministers and Presiding Officers, who are covered by special arrangements. Although they remain members of the Holyrood pension scheme, they make no contributions relating to the extra salaries they receive for those posts.

When they step down from that office they are immediately entitled to a pension of half their First Ministerial or Presiding Officer's salary.