Maude and his Cabinet friends give their gold-plated pensions a boost as they push through reforms
I’ll drink to that: Francis Maude
Francis Maude has pushed through reforms that will significantly increase Cabinet ministersâ€™ gold-plated pensions.
The embattled Cabinet Office ministerâ€™s changes will give senior politicians â€“ including himself â€“ an extra Â£314 for every year of their retirement.
Under changes that came into force yesterday, Cabinet ministers must contribute an extra 2.4 per cent towards their final salary pension scheme. However, the complex way in which their pensions are calculated means their retirement hand-outs will soar.
Cabinet ministers will now contribute Â£229 more each year than if they were an ordinary MP. Tory MP Mark Reckless discovered that, in return, they will enjoy an extra Â£314 a year from their pensions payments. Over a 20-year retirement period, the payouts will represent a Â£6,280 increase for former Cabinet ministers. Mr Reckless said: â€˜For the country as a whole, the Prime Minister and Chancellor are keen for those with the broadest shoulders to make bigger sacrifices so as to lighten the load for those who are paid less. However, there is a different approach nearer home.â€™
Cabinet ministers, who receive an extra Â£68,827 on top of the basic MP salary of Â£65,738 a year, will receive bigger pensions because the equation to calculate how much they receive involves dividing their ministerial contribution by their contribution as an MP.
A Cabinet Office spokesman said actuaries were looking into the figures.
However, Tory MP Mark Reckless has discovered that in return, they would then enjoy an extra Â£314-a-year increase in their pensions payments.
Over a 20-year retirement period, the pay-outs represent a Â£6,280 increase in these pension payments for former cabinet ministers.
Good investment: Government ministers will pick up an extra Â£314 each year of their retirement under the new plan
Todayâ€™s cabinet ministers can already look forward to a Â£731,000 retirement pot – worth a potential Â£43,000-plus a year.
Mr Reckless said: â€˜For the country as a whole the Prime Minister and Chancellor are keen for those with the broadest shoulders to make bigger sacrifices so as to lighten the load for those who are paid less. However, there is a different approach nearer home.â€™
Robert Oxley, from the Taxpayersâ€™ Alliance, said: â€˜Itâ€™s hypocritical for ministers to preach about the need to make pensions more sustainable while improving their own already extremely generous retirement deals.
â€˜Politicians must to show leadership in the face of the overwhelming need to reform public sector pensions, ensuring they are fair and affordable to taxpayers.
â€˜If Cabinet ministers are instead sneaking through bonuses for their own retirement then they will lose all moral authority to make the difficult decisions currently required of them.â€™
Tom McPhail, head of pensions research at Hargeaves Landsdown, said: â€˜The underlying problem is that whenever MPs have the opportunity to reform their pensions they lose their nerve and decide that principles should come second to self-enrichment.â€™