MPs to be stripped of power to set pensions

MEMBERS of Parliament are to have the power to set their own pensions taken away from them, the government's parliamentary minister has announced.

Leader of the Commons Sir George Young said he would be tabling a motion over the next few days transferring control of MPs' pensions to the Independent Parliamentary Standards Authority (Ipsa).

Sir George said the text of the motion he will put before MPs on Tuesday will make clear that MPs' contribution rates should be increased in line with the rest of the public sector from next April.

He said: "Once responsibility for MPs' pensions has been transferred to Ipsa, MPs will have finally relinquished the power to set the terms of their own remuneration.

"Given the failure of self-regulation, which so damaged parliament's reputation, this represents a significant step in drawing a line under the problems of the past and rebuilding public confidence."

The motion will propose that Ipsa establishes a new pension scheme for MPs by 2015.

An Ipsa spokesman said there would be a "root and branch" review of MPs' pensions arrangements before any final decision is made on the packages paid to members.

Under existing arrangements MPs contribute either 11.9 per cent, 7.9 per cent or 5.9 cent of their 65,738-a-year salaries - the normal retirement age is 65. The accrual of an MP's pension is capped at two-thirds of an MP's final salary.

The UK government has saidthe current final salary terms - which can see politicians retire after 20 years in parliament with an index-linked income of half their pay - should be scrapped.

There is speculation it could be replaced with an average salary scheme, as in much of the rest of the public sector.