Public Service Pensions Act 2013

Public Service Pensions Act 2013

2013 CHAPTER 25

Commentary on Sections and Schedules

Final

Schedule 11: Prime Minister, Lord Chancellor and Common Speaker

292. Paragraph 1 amends the Constitutional Reform and Governance Act 2010:

(a)

to remove the current exclusions that apply in respect of payment from the Parliamentary Contributory Pension Fund(5) under the MPs’ and Ministerial pension schemes to holders of the great offices of state (paragraph 1(2) and (3)(b));

(b)

to allow the holders of the great offices of state to become members of the Ministerial pension scheme (paragraph 1(3)(a)).

293. Paragraph 2 amends section 4 of the Ministerial and other Pensions and Salaries Act 1991, to enable severance payments under this section to be paid to the holders of the great offices of state.

294. Paragraph 3 amends the Ministerial and other Salaries Act 1975 to regularise the salary level of future Lord Chancellors in line with the salary of a Secretary of State. This will ensure that the pension entitlements of future Lord Chancellors under the Parliamentary Contributory Pension Fund are based on the appropriate salary level.

295. Paragraphs 4 to 6 close the existing arrangements that govern pensions for and in respect of the great offices of state.

296. Paragraph 8(1) makes clear that the changes being made relate to the pension provision of future holders of the great offices of state and do not remove the entitlement of those who have held this office (or their dependants) prior to the commencement of these provisions. This means that the entitlement of current and former Prime Ministers, Lord Chancellors and Commons Speakers to benefits is unchanged.

297. Paragraph 8(2) allows for any person appointed as Lord Chancellor between 4th September 2012 and the day on which section 33 comes into force to build up benefits in the Parliamentary Contributory Pension Fund once they cease to hold that office. This will allow Lord Chancellors who have signed a waiver (setting aside their entitlements to the current generous pension arrangements for Lord Chancellors) to participate in a tax-registered pension scheme for the remainder of their Parliamentary career, rather than in the special arrangements under the Consolidated Fund.

298. These changes will have financial implications. Currently, the pension entitlements of the great offices of state are met through the Consolidated Fund and those benefits already earned under the current arrangements will continue to be paid from the Consolidated Fund to current and former holders of great offices of state. This includes those holders of the great offices of state who have chosen to sign a waiver to their entitlements and receive benefits comparable with those provided under the Ministerial Pension Scheme. In future the employing departments of holders of the great offices of state will pay employer contributions from departmental resources and the holders of the great offices will also pay member contributions as set out in the Ministerial Pension Scheme rules.

5

This is the pension fund that pays out pensions to MPs, Ministers and other office holders in Parliament.