Clause 25 - Contributions towards cost of judicial pensions etc

Pensions Bill [Lords] – in a Public Bill Committee at 3:15 pm on 14 July 2011.

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Question proposed, That the clause stand part of the Bill.

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

This is probably the last substantive clause that we will consider, and I will deal with it briefly. The judicial pension scheme is a bit of an anomaly among public sector pensions. We have been discussing with our constituents who are nurses, teachers, police officers or various other kinds of public servant how much they must put into their public sector pensions and the additional amounts that might be required, but I think that many of us were surprised to discover that judges do not have to pay anything for their own pensions, and that the small contribution that they do make pays only for survivors’ benefits, for example. We feel that that is now indefensible, especially as the cost of providing those benefits has risen considerably. Clause 25 provides a power to introduce contributions towards the cost of judicial pensions. Judicial pension schemes are unfunded, as are many public sector pension schemes.

Who will be affected by the clause? The pension scheme under the relevant Act applies to salaried judicial office holders first appointed to office from March 1995 and those in other judicial pension schemes who have transferred their benefits into the JUPRA scheme, as it is known, currently the main judicial pension scheme. Although clause 25 amends the current judicial pension scheme, several other judicial pension schemes remain in existence, and we will make the same amendments to them. Consequently, schedule 5 inserts provisions into other relevant Acts such as the well-known District Judges (Magistrates’ Courts) Pensions Act (Northern Ireland) 1960.

On the principle of the clause, the contribution rates that we impose will be set through secondary legislation, consistent with the approach taken to contributions towards the cost of dependants’ pensions. To give a feel for the scale, in 2009-10, judges paid £4.3 million for dependants’ benefits into their pension schemes, whereas the taxpayer paid £84 million. Contributions will be taken only during the period in which the judge accrues pension benefits, so if the judge retires, resigns or is removed from office during that period, contributions will stop being taken from the date that he or she leaves office. The savings on pension costs will make an important contribution to overall spending review economies, deficit reduction and—dare I say it—fairness, and are in line with wider public service pension measures.

Photo of Malcolm Wicks Malcolm Wicks Labour, Croydon North

Are judges’ pensions uprated by RPI or CPI? Whatever the answer is, are there any changes afoot?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

To the extent that they are linked to statutory provisions—for example, public service pensions are generally linked to the increase in the earnings-related state pension, which is now indexed by CPI—judges’ pensions, the right hon. Gentleman will be pleased to know, as they are not in Croydon, will be increased in line with CPI. With that, I commend clause 25 to the Committee.

Question put and agreed to.

Clause 25 accordingly ordered to stand part of the Bill.

Schedule 5 agreed to.

Clauses 26 to 29 ordered to stand part of the Bill.