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The Parliamentary Contributory Pension Fund (PCPF) is a statutory, defined benefit pension scheme. It operates on a funded basis, meaning that contributions from employees and employers are paid into a fund, which is invested, and from which pension benefits are paid. The Fund is made up an MPs’ Pension Scheme (which provides benefits for MPs and certain office holders, such as paid chairs of Select Committees) and a Ministers’ Pension Scheme (which provides benefits for Ministers). The Minister for the Civil Service (MCS) is responsible for oversight of the Ministers’ scheme. IPSA is responsible for the MPs’ scheme. Ministers who are MPs accrue pensions from both schemes. Ministers who are in the Lords have the option of participating in the PCPF in respect of their ministerial salary, but do not receive a salary as a Member of the House of Lords.

In the past, there were separate arrangements for the pensions for the three great offices of state – the Prime Minister, Speaker of the House of Commons and Lord Chancellor. These gave entitlement to a pension of half the final office-holder’s salary on leaving office, regardless of length of service. Payments were met through the Consolidated Fund (the Government’s general bank account). The Public Service Pensions Act 2013 abolished these arrangements for future office-holders, who would instead be covered by the Ministerial  Pension Scheme. The pensions of existing office-holders continue to be met from the Consolidated Fund even where they signed a waiver to their full entitlement under the old arrangements – for example, agreeing instead to receive benefits comparable to those under the Ministerial Scheme, or to delay entitlement to age 65.

This note looks at pensions for ministers and senior office holders. See also, CBP 6283 MPs’ Pensions Scheme and CBP 5768 Public service pensions – the 2015 reforms.

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