HL Deb 21 April 1980 vol 408 cc528-9

2.47 p.m.


My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what percentage of the cumulative cost of index-linked pension enjoyed by retired civil servants is met by serving civil servants; whether they will state for every £1 contributed by civil servants what is the amount contributed by the Government as employer; and whether they will provide the same information in respect of occupational pension schemes generally.


My Lords, the annual rate of pension contribution by civil servants, at 1st January 1980 pay rates, amounted to about 46 per cent. of the expenditure on Civil Service pensions in 1979–80. The scheme is unfunded, so that no employer contribution as such is paid. On the actuarial assumptions which were used in the 1979 pay research exercise the notional employer contribution to a funded scheme would have been of the order of £1.50 for every £1 of employee contribution. The latest survey by the National Association of Pension Funds shows that in contributory staff pension schemes the employer contribution is on average about £2.45 for every £1 of employee contribution.


My Lords, I wish to thank the noble Earl for that very informative reply, but may I point out that it seems that in the occupational schemes generally the employer pays a bigger contribution than does the Treasury in relation to civil servants? Is the noble Lord aware that the National Whitley Council Staff Side have issued a paper, agreed incidentally by the Civil Service Department, which demonstrates that 80 per cent. of the index-linked pensions are paid for by serving civil servants?


My Lords, I think the latter figure, to which the noble Lord referred, is somewhat high. My under- standing is that less than 50 per cent. of the contribution which civil servants pay at the moment goes towards the funding of the retirement pensions. With regard to the first part of the noble Lord's question, it is perfectly true that in private schemes the employer pays a larger amount than is done under public service pension schemes, but then the rates of benefit are better.