IPSA to consult on raising MPs’ pension contributions and freezing pay

MPs will have to pay more into their pension schemes and will see their pay frozen for a year under recommendations by the Independent Parliamentary Standards Authority (IPSA).

MPs will continue to earn £65,738 a year until 2013, and the IPSA will consult on a 1% increase in the years 2013/14 and 2014/15.

The IPSA has also launched a public consultation on its recommendation to increase MPs’ pension contributions by 1.85%.

It is also consulting to change the rate at which benefits accrue. In the current scheme, MPs can select the rate at which they accrue benefits – 40ths, 50ths or 60ths or their annual salary.

The consultation will run from 29 February, and any decision will be announced by the end of 2013. The IPSA will have a final decision on a contribution rise once the consultation closes.

Ian Kennedy, chair of the IPSA, said: “We have been given responsibility for reviewing and, as necessary, reforming MPs’ pay and pensions.

“We are exploring the broader question of how to reform MPs’ remuneration to make it fair to MPs and taxpayers alike and, crucially, how to make it sustainable.

“In the meantime, we must be mindful of the conditions in the rest of the public sector where pay has remained static and where settlements will see most people pay more into their pensions too.

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“While we address the longer term changes which are needed, I believe it is right that we act in the interim so MPs’ circumstances more closely reflect those experienced by others.”

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