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Brown to review MPs’ pensions

Prime Minister Gordon Brown is reported to have ordered a review of MPs’ lucrative final salary pensions.

According to reports in the weekend papers, Brown has asked the Government actuary to look into abolishing a defined benefit scheme for MPs as well as options such as increasing MPs’ retirement age, changing provisions for retirement on the grounds of ill health, increasing member contributions, changing the accrual rate and changing the maximum level of benefits that can be built up.

The Conservatives said last year that the scheme should close to new entrants. Leader David Cameron says new MPs should instead be enrolled in a defined contribution scheme.

Brown is likely to have been prompted by predictions that the economic crisis would force significant numbers of remaining private sector final salary schemes to close.

Last month the National Association of Pensions Funds estimated that 52 per cent of defined benefit schemes currently open to new members in the private sector could close as a result of the current economic crisis. It says 1,000 pension schemes are in jeopardy.

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