Research and analysis

Actuarial valuation of the Parliamentary Contributory Pension Fund as at 1 April 2014

The Government Actuary has completed his actuarial valuation of the Parliamentary Contributory Pension Fund as at 1st April 2014.

Document

Actuarial valuation of the Parliamentary Contributory Pension Fund as at 1 April 2014

This file may not be suitable for users of assistive technology. Request an accessible format.

If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email enquiries@gad.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.

Detail

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.

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.