The Government Actuary has carried out the actuarial valuation of the Parliamentary Contributory Pension Fund (PCPF) as at 1 April 2014. The key conclusions from the valuation are:
Past Service assessment
Based on the method and assumptions adopted for this assessment, the value of liabilities accrued up to the valuation date (including an allowance for future expenses) is assessed as £528.1 million. The market value of the assets on the same date is £520.5 million. The deficit at 1 April 2014 is accordingly £7.6 million.
Future Service assessment
Based on the method and assumptions adopted, and allowing for the new benefit structures coming into force in May 2015, the cost of benefits accruing in the PCPF for each year of membership (MPs and officeholders combined) is assessed as 23.2% of scheme payroll.
Members’ contributions to the Fund, including those paid by officeholders, are expected to average 11.5% of scheme payroll. The Exchequer’s share of the cost of accruing benefits is therefore assessed as 11.7% of payroll.
Recommended Exchequer contribution rate
Taking account of the Exchequer share of future service costs (11.7% of pay) and of the additional contributions needed to meet the deficit (1.2% of pay), The Government Actuary recommends that the rate of Exchequer contribution to be paid from 1 April 2015 until 31 March 2018 should be 12.9% of pensionable salaries in respect of MPs’ and officeholders’ benefits.