HC Deb 06 March 2001 vol 364 cc207-8W
Mrs. Lait

To ask the Minister for the Cabinet Office what the employers' contribution will be to the new civil service pension scheme due to be introduced in October 2002. [151867]

Mr. Stringer

I refer the hon. Member to my answer of 7 February 2001,Official Report, column 542W. The aim is a new scheme which better reflects employment costs. The new scheme will have an important part to play in supporting the wider corporate objectives and reward strategies of the civil service reform programme.

Employer contributions are set on advice from the Government Actuary. Salary-banded contributions averaging 13.5 per cent. of pensionable pay are paid by employers for staff in the existing defined benefit scheme.

The first strand of the new arrangements is an improved defined benefit scheme. Employer contributions to this will be the same as for the existing defined benefit scheme, with the entire cost of the changes met through an increase in the member contribution rate. The second strand of the new arrangements is a defined contribution plan (delivered through stakeholder pension products). Employers will make contributions to this according to the age of the scheme member. In addition to the age-related contribution, the employer will match employee contributions to a maximum of 3 per cent. of pensionable pay. The Government Actuary has not yet finalised the contribution scale for the defined contribution plan, but the scale will be commensurate with the costs to employers of the new defined benefit option for those expected to be attracted to the defined contribution plan.