MPs' pensions to cost taxpayers double

The true cost of MP's pensions is double the estimate used in Commons' accounts, which could hit their effort for a big pay rise.

A footnote in the accounts gives a figure for its MPs' pensions costs based on accounting standard FRS 17, which creates a value double that used in the main body of the accounts due to taking a less optimistic approach to the performance of the stock markets.

Under FRS 17 the Treasury would have to contribute £16.5m a year to meet its liabilities, compared to the £7.8m figure in the main body.

Pensions consultant John Ralfe argued that the figure used in the main body of the accounts was out of date and would massively understate the true value of the pension scheme, reported the FT.

The cost of an MP's salary is 38% its value under FRS 17, compared to 18.1% used in the main body of the accounts.

'This means the Treasury are not putting enough cash each year to pay for new pension promises, let alone pay down the deficit,' said Ralfe.

Further reading:

36% of pension schemes in jeopardy

Pension schemes face rules hit