MPs' pensions to cost taxpayers double
The Treasury will have to contribute more towards MPs' pensions than it currently does if it follows accounting standard FRS 17, say experts
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of the accounts was out of date and would massively understate the true value of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:
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Pension schemes face rules
hit