Nigel Farage, Richard Tice and Robert Jenrick are among the Reform UK MPs saving into generous “gold plated” public sector pensions when their party wants to end similar schemes for future workers.
Most employees in the public sector – including MPs – get the chance to enroll in defined benefit pensions, which guarantee an income for life in retirement.
These schemes are exceptionally rare in the private sector nowadays, and Reform has been heavily critical of the cost to the taxpayer of their remaining use in the public sector.
Farage, the party’s leader, has called them “the single biggest ticking bomb in our government finances,” adding the gap between public and private sector schemes amounts to “pension apartheid.”
The party has since said it would close one of these schemes – the local government pension scheme received by council workers – to new entrants, and would conduct a review of others.
Currently, there are around 6.9million members across England and Wales in the LGPS scheme – which holds defined benefit pensions.
Reform are the only party to have such a policy – Labour, Conservatives and the Liberal Democrats do not – although Restore Britain’s leader Rupert Lowe has said he would bring “overly generous public sector schemes in line with those available in the private sector.”
Supporters of public sector pensions argue that they provide certainty and security in retirement, helping attract and retain teachers, nurses, police officers and other essential workers who often receive lower pay than they might in the private sector.
But critics argue that so-called “gold-plated” public sector pensions are more generous than most private sector schemes and can leave taxpayers carrying significant costs, equating to £56bn last year.
According to a freedom of information (FOI) request by The i Paper, all of the Reform party’s MPs are currently enrolled into the Parliamentary pension scheme.
How Parliamentary pension schemes are calculated
They are able to accrue an annual pension entitlement of 1/51 of their pay in return for a contribution worth 11 per cent of their salary.
It means over a parliamentary term of five years, a backbench MP on the basic annual salary of £98,599 could accrue a guaranteed pension of approaching £10,000 a year for the rest of their life after they retire.
MPs are enrolled into the pension by default but can choose to opt out.
Just 13 MPs from across all parties are not contributing to the pension scheme, eight of whom are Labour MPs and five are Conservative, according to the FOI request to the Independent Parliamentary Standards Authority.
The exact reason why each MP opts out of the scheme is not known. There may be various reasons, such as to increase take home pay.
Reform previously said it plans to remove access to DB schemes for all new public sector workers from 2030 in a bid to phase out the scheme. Existing workers would keep their current arrangement.
Rupert Lowe, the leader and sole MP for Restore Britain, is also saving into an MP pension, the FOI shows, as of the end of May, when the data was sent by IPSA.
Reform UK did not respond to questions from The i Paper about whether the MP pension scheme would be part of its review or whether any of its own MPs had considered opting out of the schemes themselves, while Restore Britain did not reply to similar questions.
Unions accuse Reform of ‘hypocrisy’
Unions representing the types of workers who could be impacted by Reform’s plans to alter public sector pensions accused the party of “hypocrisy” for arguing that the schemes should be cut while its own MPs benefit from them.
Mike Clancy, general secretary of the Prospect Union, said it was deeply hypocritical for Reform MPs to attack the pensions of millions of public sector workers while taking advantage of the Parliamentary scheme.
“There is nothing wrong with Reform MPs opting into their workplace pension scheme, what is wrong is trying to deny millions of future workers the same opportunity to have a decent and secure retirement,” he said.
George Georgiou, the GMB Union’s national pensions officer, which represents some local government workers, said: “Local authority workers – the people who keep our town and cities clean and look after our loved ones – have faced more than ten years of brutal pay cuts.
“Attacking their pensions, while happily signing up to their own public sector schemes – is a low blow.”
Tom McPhail, a pensions expert and former head of retirement analysis at Hargreaves Lansdown, said that Reform “should definitely commit to reforming the MPs scheme if they get into power, as a precondition for any wider reform of public sector schemes”.
“Otherwise it’s just rank hypocrisy,” he added.
How defined contribution pension schemes work – and how they differ from defined benefit plans
Defined benefit pension schemes differ from the retirement savings most workers have.
Most employees are enrolled in defined contribution pension schemes. With these schemes, workers save into their own personal pension pots and have a responsibility for making the money last throughout retirement, instead of being guaranteed payments like those with defined benefit pensions.
Most public sector pensions are unfunded, meaning contributions from current workers, and the tax payer, pay for the pensions of current retirees, but the local government and MP schemes are funded – meaning contributions are invested for the future.
Criticising the local government pension schemes earlier this year, Tice, Reform’s deputy leader, said the current schemes were “underperforming hugely”, had “no coordination” and were investing in “woke nonsense”.
Reform has vowed to bar new entrants to the current schemes and enroll new employees into defined contribution schemes if it wins power. It has faced the threat of strikes from some workers over its plans, including from the firefighters’ union.
The current Labour government has appeared to reject any change to public sector pensions. When a group of schools planned to offer less generous pensions in return for higher pay last year, the Department for Education opposed it.
Some individual Conservative MPs have proposed changes to public sector pensions – including ex-Chancellor Jeremy Hunt, who wrote last year that the schemes should be closed to new entrants – but the party does not have an overall policy to cut them.
A paper earlier this year by the Policy Exchange think tank suggested that shifting public sector pensions to a defined contribution model would come with a short-term cost – peaking at £3.4bn six years after implementation – because the Treasury would still have to pay out for the pensions of retired ex-public sector workers, while not getting contributions from current workers.
But it found there would be long-term savings of £37.4bn per year 50 years after adoption.
Hence then, the article about farage among reform mps collecting gold plated pensions despite calling for cut was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( Farage among Reform MPs collecting gold-plated pensions – despite calling for cut )
Also on site :
- Is This Food Network Legend Competing on ‘Dancing With the Stars’ This Season? The Internet Sure Hopes So
- 1968 Country Pop Ballad Billy Joel Wishes He’d Written, Is Ranked One of the ‘Greatest Country Songs of All Time’
- Iran-US war latest: Trump’s ‘economic D-Day’ arrives as Tehran threatens ‘earthquake-like’ retaliation