Constitutional Reform and Governance Act 2010

Part 1 Parliamentary and other pensions

The Parliamentary Contributory Pension Fund etc

Continuance of Fund

1 There is to continue to be a fund known as the Parliamentary Contributory Pension Fund (“the Fund”).

Number and composition of trustees

2 (1) The following are to be the trustees of the Fund—

(a) one person appointed by the IPSA after consulting the Minister for the Civil Service and the persons who are already trustees of the Fund,

(b) one person appointed by the Minister for the Civil Service after consulting the IPSA and the persons who are already trustees of the Fund, and

(c) 8 persons nominated and selected in accordance with arrangements under paragraph 3 (“member-nominated trustees”).

(2) Paragraphs 49 and 50 make transitional provision about the trustees of the Fund.

Member-nominated trustees

3 (1) The trustees of the Fund must make arrangements for the nomination and selection of member-nominated trustees.

(2) The arrangements must provide for the member-nominated trustees to be—

(a) nominated as the result of a process in which all the members of a scheme under paragraph 12 and all the members of a scheme under paragraph 16 are eligible to participate, and

(b) selected as the result of a process in which some or all of those persons are eligible to participate.

(3) The arrangements must—

(a) include provision for the nomination and selection process to take place within a reasonable period of any vacancy arising,

(b) include provision, where a vacancy is not filled because insufficient nominations are received, for the nomination and selection process to be repeated at reasonable intervals until the vacancy is filled, and

(c) include provision that, where the IPSA or the Minister for the Civil Service so requires, a person who is not a member of a scheme under paragraph 12 and is not a member of a scheme under paragraph 16 must have the approval of the IPSA or the Minister for the Civil Service to qualify for selection as a member-nominated trustee.

(4) The arrangements may include provision that where the number of nominations received is equal to or less than the number of vacancies, the nominees are to be treated as selected (subject to sub-paragraph (3)(c)).

Remuneration

4 (1) The IPSA may, with the consent of the Treasury, provide for remuneration and allowances to be payable to the trustees of the Fund.

(2) Any such remuneration and allowances are to be paid from the assets of the Fund.

Resignation and removal of trustees

5 (1) A person appointed as a trustee of the Fund by the IPSA under paragraph 2(1)(a)—

(a) may resign by giving written notice to the IPSA, and

(b) may be removed by the IPSA after consulting the Minister for the Civil Service and all the other trustees of the Fund.

(2) A person appointed as a trustee of the Fund by the Minister for the Civil Service under paragraph 2(1)(b)—

(a) may resign by giving written notice to the Minister for the Civil Service, and

(b) may be removed by the Minister for the Civil Service after consulting the IPSA and all the other trustees of the Fund.

(3) A person who is a member-nominated trustee—

(a) may resign by giving written notice to the other trustees of the Fund, and

(b) may be removed by all the other trustees of the Fund acting together.

Proceedings

6 (1) Subject to any provisions contained in a scheme under paragraph 8 because of paragraph 8(1)(d), the trustees of the Fund may determine their own procedure.

(2) The validity of any proceedings of the trustees of the Fund is not affected by—

(a) a vacancy among the trustees, or

(b) a defect in the appointment of a trustee.

Powers of trustees

7 (1) The trustees of the Fund may invest the assets of the Fund, whether at the time in a state of investment or not, in any investment whatever and may also from time to time vary any such investments.

(2) The trustees of the Fund may settle or compromise any claim or dispute relating to the Fund, but—

(a) so far as the claim or dispute relates to a scheme under paragraph 8 or 12, they may do so only with the consent of the IPSA, and

(b) so far as the claim or dispute relates to a scheme under paragraph 16, they may do so only with the consent of the Minister for the Civil Service.

(3) The IPSA must consult the Minister for the Civil Service before giving its consent to the settlement or compromise of a claim or dispute relating to a scheme under paragraph 8.

(4) Section 35(1) to (4) of the Pensions Act 1995 (pension scheme trustees must prepare statement of investment principles) applies to the trustees of the Fund despite any provision in regulations under section 35 of that Act which would (apart from this sub-paragraph) prevent it applying.

(5) Any provision in regulations under that section which would require the trustees of the Fund to consult the employer applies as if it required them to consult the IPSA and the Minister for the Civil Service.

Administration scheme

8 (1) The IPSA may make a scheme containing provision about—

(a) the administration of the Fund,

(b) the management of the Fund’s assets,

(c) the indemnification of the trustees (and former trustees) of the Fund,

(d) the proceedings of the trustees of the Fund, and

(e) the application of the Fund’s assets in connection with the matters in paragraphs (a) to (d).

(2) A scheme under this paragraph may in particular—

(a) include any or all of the provisions specified in paragraphs 31 to 33,

(b) make different provision in relation to different cases, circumstances or persons,

(c) make such incidental, consequential and transitional provision (other than provision modifying an enactment or subordinate legislation) as the IPSA considers appropriate.

(3) In sub-paragraph (2)(c) the reference to subordinate legislation does not include a scheme under this paragraph.

(4) No provision of a scheme under this paragraph is to be construed as restricting the powers of the trustees under paragraph 7(1).

Procedure for administration scheme

9 (1) The IPSA may make a scheme under paragraph 8 only with the consent of the trustees of the Fund.

(2) Before making a scheme under paragraph 8 the IPSA must consult—

(a) the Treasury,

(b) the Minister for the Civil Service,

(c) persons the IPSA considers to represent those likely to be affected by the scheme, and

(d) any other person the IPSA considers appropriate.

(3) The IPSA must send to the Speaker of the House of Commons for laying before the House of Commons—

(a) any scheme made by it under paragraph 8, and

(b) a statement of the reasons for making the scheme.

(4) When the scheme and the statement of reasons have been laid, the IPSA must publish them in a way it considers appropriate.

Exchequer contribution to Fund

10 (1) In respect of each financial year an Exchequer contribution is to be paid into the Fund out of money provided by Parliament.

(2) Subject to any provision made by the IPSA under paragraph 11, the amount of the contribution for any financial year is to be calculated in accordance with recommendations for that year contained in a report made by the Government Actuary under this paragraph.

(3) The Government Actuary must make a report under this paragraph as soon as practicable after the beginning of—

(a) the period of three years beginning with the relevant date, and

(b) each succeeding period of three years.

(4) The “relevant date” means the date immediately following the end of the three year period which is current for the purposes of section 3 of the Parliamentary and other Pensions Act 1987 when this paragraph comes into force.

(5) The report is to be made to—

(a) the trustees of the Fund,

(b) the IPSA,

(c) the Minister for the Civil Service, and

(d) the Treasury.

(6) The report must—

(a) report on the general financial position of the Fund at the beginning of the period of three years in which the report is made, and

(b) make a recommendation as to the rate at which (subject to any subsequent report under this paragraph) Exchequer contributions should be paid into the Fund in respect of any financial year beginning after the report is made.

(7) The rate is to be expressed by reference to such matters as the Government Actuary considers appropriate.

(8) A copy of every report made by the Government Actuary under this paragraph is to be laid before the House of Commons.

Power to determine Exchequer contribution

11 (1) The IPSA may, with the relevant consents, make provision for determining the Exchequer contribution in respect of any financial year.

(2) The “relevant consents” means—

(a) if the result of making the provision is that the amount of the Exchequer contribution in respect of any financial year is less than it otherwise would be, the consent of the Treasury, the Minister for the Civil Service and the trustees of the Fund, and

(b) otherwise, the consent of the Treasury and the Minister for the Civil Service.

(3) The “Exchequer contribution” means the amount to be paid into the Fund under paragraph 10.

(4) Before making provision under this paragraph the IPSA must consult—

(a) (if sub-paragraph (2)(a) does not apply) the trustees of the Fund,

(b) the Government Actuary, and

(c) persons appearing to the IPSA to represent persons likely to be affected by the provision.

(5) The IPSA must send to the Speaker of the House of Commons for laying before the House of Commons—

(a) any representations made by the trustees of the Fund in response to consultation under this paragraph,

(b) any provision made by the IPSA under this paragraph, and

(c) a statement of the reasons for making the provision.

(6) When the provision and the statement of reasons have been laid, the IPSA must publish them in a way it considers appropriate.

(7) Provision under this paragraph may—

(a) apply to a financial year which has already ended or which has begun before the making of the provision, and

(b) make such incidental, consequential and transitional provision (other than provision modifying an enactment or subordinate legislation) as the IPSA considers appropriate.

MPs’ pension scheme

MPs’ pension scheme

12 (1) The IPSA may make a scheme containing provision about the application of the assets of the Fund in or towards the provision of pensions for or in respect of persons with service as a member of the House of Commons, in respect of that service.

(2) A scheme under this paragraph may not provide for the application of any of the assets of the Fund in or towards the provision of pensions for or in respect of persons with service as Lord Chancellor.

(3) A scheme under this paragraph may not provide for the application of any of the assets of the Fund in or towards the provision of pensions for or in respect of a person (“P”) with service as—

(a) Prime Minister and First Lord of the Treasury, or

(b) Speaker of the House of Commons.

(4) Sub-paragraph (3) does not apply if P elects, in accordance with provision made by the scheme, to contribute to the Fund out of P’s salary as a member of the House of Commons while holding the office of Prime Minister and First Lord of the Treasury or Speaker of the House of Commons.

(5) The provision mentioned in sub-paragraph (4) may not provide for a pension payable under the scheme for or in respect of P to be calculated by reference to service as a member of the House of Commons before 28 February 1991.

Meaning of “service as a member of the House of Commons”

13 (1) For the purposes of this Schedule a person is to be treated as in service as a member of the House of Commons at any time if at that time a salary is or was payable to the person under—

(a) section 4 of the Parliamentary Standards Act 2009, or

(b) in relation to a time before that section was in force, the resolutions of the House of Commons then in force relating to the remuneration of its members.

(2) For the purposes of this Schedule service as a member of the House of Commons includes service as the holder of a qualifying office or position.

(3) In relation to a time when a determination under section 4(4) of the Parliamentary Standards Act 2009 is in effect a “qualifying office or position” means an office or position in respect of which, because of section 4A(2) of that Act, a higher salary is payable than the salary payable to members of the House of Commons generally.

(4) In relation to a time before the first determination under section 4(4) of the Parliamentary Standards Act 2009 comes into effect a “qualifying office or position” means—

(a) the office of Chairman of Ways and Means and the office of Deputy Chairman of Ways and Means,

(b) an office or position in respect of which, under the resolutions of the House of Commons then in force relating to the remuneration of its members, a higher salary was payable than the salary payable to members of the House of Commons generally.

MPs’ pension scheme: further provision

14 (1) A scheme under paragraph 12 may in particular—

(a) include any or all of the provisions specified in paragraphs 24 to 32, except for—

(i) the provision specified in paragraph 26(1), unless with the consent of the trustees of the Fund,

(ii) the provision specified in paragraph 31, unless with the consent of the trustees of the Fund, and

(iii) the provision specified in paragraph 29(2),

(b) make provision which has effect from a date earlier than the date the scheme is made,

(c) make provision in relation to service before the passing of this Act,

(d) make different provision in relation to different cases, circumstances or persons, and

(e) make such incidental, consequential and transitional provision (other than provision modifying an enactment or subordinate legislation) as the IPSA considers appropriate.

(2) In sub-paragraph (1)(e) the reference to subordinate legislation does not include a scheme under paragraph 12.

Procedure for MPs’ pension scheme

15 (1) Before making a scheme under paragraph 12 the IPSA must consult—

(a) the Treasury,

(b) the Minister for the Civil Service,

(c) the trustees of the Fund,

(d) persons the IPSA considers to represent those likely to be affected by the scheme,

(e) the Government Actuary,

(f) the Review Body on Senior Salaries, and

(g) any other person the IPSA considers appropriate.

(2) The IPSA must send to the Speaker of the House of Commons for laying before the House of Commons—

(a) any representations made to it by the trustees of the Fund in response to consultation under this paragraph,

(b) any scheme made by it under paragraph 12, and

(c) a statement of the reasons for making the scheme.

(3) When the scheme and the statement of reasons have been laid, the IPSA must publish them in a way it considers appropriate.

(4) The reference in sub-paragraph (1)(f) to the Review Body on Senior Salaries—

(a) if the name of the body is changed, is to be treated as a reference to the body by its new name, and

(b) if the functions of the body (or substantially corresponding functions) become functions of a different body, is to be treated as a reference to the body by which those functions are exercisable.

(5) Any question arising under sub-paragraph (4) is to be determined by the Speaker of the House of Commons.

Ministers’ etc pension scheme

Ministers’ etc pension scheme

16 (1) The Minister for the Civil Service may make a scheme containing provision about the application of the assets of the Fund in or towards the provision of pensions for or in respect of persons with service to which this paragraph applies, in respect of that service.

(2) This paragraph applies to service as—

(a) the holder of an office specified in Parts 1 to 4 of Schedule 1 to the Ministerial and other Salaries Act 1975 (ministerial offices),

(b) the holder of an office specified in Part 1 of Schedule 2 to that Act (Opposition leaders and whips),

(c) Speaker of the House of Lords,

(d) Chairman of Committees of the House of Lords,

(e) Deputy Chairman of Committees of the House of Lords.

(3) A scheme under this paragraph may not provide for the application of any of the assets of the Fund in or towards the provision of pensions for or in respect of a person with service as—

(a) Lord Chancellor,

(b) Prime Minister and First Lord of the Treasury, or

(c) Speaker of the House of Commons.

Ministers’ etc pension scheme: further provision

17 (1) A scheme under paragraph 16 may in particular—

(a) include any or all of the provisions specified in paragraphs 24 to 32 and 34, except the provisions specified in paragraphs 26(1) and 31 unless with the consent of the trustees of the Fund,

(b) make provision which has effect from a date earlier than the date the scheme is made,

(c) make provision in relation to service before the passing of this Act (including, in relation to service within paragraph 16(2)(a) or (b), service before the passing of the Ministerial and other Salaries Act 1975),

(d) make different provision in relation to different cases, circumstances or persons, and

(e) make such incidental, consequential and transitional provision (other than provision modifying an enactment or subordinate legislation) as the Minister considers appropriate.

(2) In sub-paragraph (1)(e) the reference to subordinate legislation does not include a scheme under paragraph 16.

Procedure for Ministers’ etc pension scheme

18 (1) Before making a scheme under paragraph 16 the Minister for the Civil Service must consult—

(a) the IPSA,

(b) the Government Actuary,

(c) the trustees of the Fund, and

(d) any other person the Minister considers appropriate.

(2) The Minister for the Civil Service must lay before each House of Parliament—

(a) any representations made to the Minister by the trustees of the Fund in response to consultation under this paragraph,

(b) any scheme made by the Minister under paragraph 16, and

(c) a statement of the reasons for making the scheme.

(3) When the scheme and the statement of reasons have been laid, the Minister must publish them in a way the Minister considers appropriate.

Supplementary provision

Protection of accrued rights

19 (1) This paragraph applies where—

(a) the IPSA makes a scheme under paragraph 12, or

(b) the Minister for the Civil Service makes a scheme under paragraph 16,

(the “new scheme”).

(2) The new scheme must not make any provision in relation to an accrued right which puts (or might put) a person in a worse position than the person would have been in apart from the provision.

(3) Sub-paragraph (2) does not apply if—

(a) the trustees of the Fund consent to the new scheme making the provision, and

(b) the person making the new scheme is satisfied that the consent requirement is met.

(4) The consent requirement is met if under the new scheme the provision has effect in relation to an accrued right only with the written consent, given in accordance with sub-paragraph (5), of—

(a) the person (“P”) in respect of whose service the right has accrued, or

(b) if P is dead, the persons (“the survivors”) who because of the accrued right are entitled, or may become entitled, to a pension or the benefit of any pension.

(5) Consent is given in accordance with this sub-paragraph if it is given after the person making the scheme has given P (or the survivors)—

(a) information in writing which adequately explains the nature of the provision and its effect,

(b) notice in writing that they may make representations about the provision,

(c) an adequate opportunity to make such representations, and

(d) notice in writing that the provision has effect in relation to the accrued right only with their written consent.

(6) Consent may be given by a person acting on behalf of P (or the survivors); and the references in sub-paragraph (5) to P (or the survivors) include a person acting on their behalf.

(7) In sub-paragraph (4)(a) “service” means—

(a) where the new scheme is a scheme under paragraph 12, service as a member of the House of Commons, and

(b) where the new scheme is a scheme under paragraph 16, service to which that paragraph applies.

Meaning of “accrued right”

20 (1) This paragraph applies for the interpretation of paragraph 19.

(2) “Accrued right”, in relation to a provision of the new scheme, means a right (including a contingent right) or entitlement to or in respect of a pension or future pension payable out of the Fund which has accrued in respect of service before the provision comes into force.

(3) Where the new scheme is a scheme under paragraph 12, in this paragraph “service” means service as a member of the House of Commons.

(4) Where the new scheme is a scheme under paragraph 16, in this paragraph “service” means service to which that paragraph applies.

Power to make consequential amendments

21 (1) The Minister for the Civil Service may by order make such modifications of any enactment or subordinate legislation (whenever passed or made) as the Minister considers appropriate in consequence of any provision of a scheme made by the IPSA or the Minister for the Civil Service under this Part of this Schedule.

(2) In sub-paragraph (1) the reference to subordinate legislation does not include a scheme made by the IPSA or the Minister for the Civil Service under this Part of this Schedule.

(3) An order under this paragraph is to be made by statutory instrument.

(4) A statutory instrument containing an order under this paragraph is subject to annulment in pursuance of a resolution of either House of Parliament (subject to sub-paragraph (5)).

(5) A statutory instrument containing an order made under this paragraph in consequence only of a scheme under paragraph 12 is subject to annulment in pursuance of a resolution of the House of Commons.

Interpretation etc

22 (1) A scheme made by the IPSA under paragraph 8 or 12 may amend or revoke any previous scheme made by the IPSA under that paragraph.

(2) A scheme made by the Minister for the Civil Service under paragraph 16 may amend or revoke any previous scheme made by the Minister under that paragraph.

(3) For the purposes of this Schedule “member”—

(a) in relation to a scheme under paragraph 12, means a person with service as a member of the House of Commons who, in respect of that service, has a right or entitlement under the scheme to a pension or future pension payable out of the Fund, and

(b) in relation to a scheme under paragraph 16, means a person with service to which that paragraph applies who, in respect of that service, has a right or entitlement under the scheme to a pension or future pension payable out of the Fund.

(4) In this Part of this Schedule—

• “the Fund” means the Parliamentary Contributory Pension Fund;

• “the IPSA” means the Independent Parliamentary Standards Authority;

• “member-nominated trustee” has the meaning given by paragraph 2;

• “modifications” includes additions, alterations and omissions (and related expressions are to be read accordingly);

• “pension” includes gratuity;

• “subordinate legislation” has the same meaning as in the Interpretation Act 1978.