Parliamentary and Other Pensions Act 1972

Part I — General Provisions

Reconstitution of members' contributory pensions scheme

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• (1) The fund constituted in accordance with section 4 of the Act of 1965 under the name of the Members' Contributory Pension Fund shall as from the passing of this Act be known as the Parliamentary Contributory Pension Fund (in this Part of this Act referred to as " the Fund ").

• (2) The following provisions of this Part of this Act shall have effect with respect to the Fund and to contributions to and payments to be made out of the Fund; and, so far as those provisions relate to Members of the House of Commons, they shall have effect in substitution for the provisions of Part II of the Act of 1965.

• (3) The House of Commons shall have power, by Order of the House, to appoint Trustees of the Fund and to remove any Trustee so appointed.

• (4) The persons who immediately before the passing of this Act are the Trustees appointed under section 4(3) of the Act of 1965 shall by virtue of this subsection be Trustees of the Fund (with or without other Trustees appointed under the last preceding subsection) as if they had been appointed under the last preceding subsection, and shall be removable by Order of the House of Commons accordingly.

• (5) The provisions of Schedule 1 to this Act shall have effect with respect to the number, qualification and proceedings of Trustees of the Fund, the distribution of functions between the Custodian Trustee and the Managing Trustees, and the administration of the Fund.

• (6) All pensions and other sums payable under this Act by the Trustees of the Fund (in the following provisions of this Act referred to as " the Trustees ") shall be paid out of the Fund, and all sums received by the Trustees under this Act shall be paid into the Fund.

• (7) The Trustees may invest any property in their hands, whether at the time in a state of investment or not, in any investments whatsoever and wheresoever and may also from time to time vary any such investments.

Voluntary participation by holders of Ministerial and other offices

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• (1) In this Part of this Act " qualifying office " means any of the following offices, that is to say—

• (a) the offices specified in Parts I to IV of Schedule 1 to the Ministerial and other Salaries Act 1972, except the office of Prime Minister and First Lord of the Treasury ;

• (b) the offices specified in Part I of Schedule 2 to that Act; and

• (c) the offices of Chairman of Ways and Means, Deputy Chairman of Ways and Means and Chairman of Committees of the House of Lords.

• (2) In respect of any continuous period beginning on or after 1st April 1972 for which a person is—

• (a) the holder of one and the same qualifying office, or

• (b) the holder successively of two or more qualifying offices in respect of which the same salary is payable,

he may elect to be, or not to be, a participant under this section.

• (3) In respect of any such period as is mentioned in subsection (2) of this section (in this Part of this Act referred to as a " period of tenure of a qualifying office ")—

• (a) if that period began before, or begins on the date of, the passing of this Act, an election by a person not to be a participant under this section must be made by notice in writing given to the Trustees before the end of the period of three months beginning with the passing of this Act, and

• (b) in any other case, such an election must be made by notice in writing given to the Trustees before the end of the period of three months beginning with the date on which the period of tenure of a qualifying office in question began;

and any person who, being entitled to make an election under subsection (2) of this section in respect of a period of tenure of a qualifying office, does not give notice in respect of that period in accordance with paragraph (a) or paragraph (b) of this subsection, shall be deemed to have elected to be a participant under this section in respect of that period.

• (4) In the following provisions of this Act any reference to a period of tenure of a qualifying office for which a person has elected to be a participant under this section shall be construed as including any such period in respect of which, by virtue of subsection (3) of this section, a person is to be deemed to have so elected.

Contributions from Parliamentary remuneration

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• (1) Subject to the provisions of this section, there shall be deducted from each payment of salary made pursuant to any resolution of the House of Commons relating to the remuneration of Members, being a payment made in respect of any period beginning on or after 1st January 1972, a sum calculated at the rate of the appropriate amount per annum ; and all sums so deducted shall be paid into the Fund.

• (2) For the purposes of the preceding subsection the appropriate amount per annum, in relation to a payment of salary made pursuant to any such resolution as is mentioned in that subsection, is five per cent. of a Member's ordinary salary in accordance with that resolution.

• (3) No sums shall be deducted under this section from salaries payable pursuant to any such resolution to the Speaker of the House of Commons, or to any person who is or has been Prime Minister and First Lord of the Treasury, in respect of any period after the date on which he is or was elected or appointed as such.

• (4) If any salary from which a deduction is required to be made under this section is not drawn, there shall be set aside, out of moneys available for the payment, a sum equal to the relevant deduction, and any sum so set aside shall be dealt with as if it were a sum so deducted.

• (5) Any sums which, under section 5 of the Act of 1965 or pursuant to any resolution of the House of Commons of the present Session, have been deducted from payments of salary for the period, or any part of the period, beginning on 1st January 1972 and ending with the passing of this Act, or set aside out of moneys available for the payment of any such salary, shall, in so far as they would have fallen to be so deducted or set aside under this section if it had been in force at the material time, be treated as sums deducted or set aside under this section ; and any sum so deducted which would not in that event have fallen to be deducted under this section shall be paid to the Member from whose salary it was deducted.

• (6) In this Part of this Act " a Member's ordinary salary ", in relation to any such resolution as is mentioned in subsection (1) of this section,—

• (a) if the resolution provides for salary to be paid at a higher rate to Members other than those who are holders of an office, or in receipt of a salary as holders of an office, of a kind specified or described in the resolution, means a Member's yearly salary at that higher rate, and

• (b) in any other case, means a Member's yearly salary at the rate specified in the resolution.

Contributions from participants under s. 2

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• (1) From each payment of salary made to any person for a period of tenure of a qualifying office in respect of which he has elected to be a participant under section 2 of this Act, or for any part of such a period, there shall (subject to subsection (4) of this section) be deducted a sum calculated at the rate of the appropriate amount per annum; and all sums so deducted shall be paid into the Fund.

• (2) For the purposes of the preceding subsection the appropriate amount per annum, in relation to a payment of salary made to a person at a time when he is not or was not a Member of the House of Commons, is five per cent. of the annual amount of that salary.

• (3) For the purposes of subsection (1) of this section the appropriate amount per annum, in relation to a payment of salary made to a person at a time when he is or was a Member of the House of Commons, is five per cent. of the difference between—

• (a) the aggregate of the annual amount of that salary and of the annual amount of the salary which, pursuant to any resolution of the House of Commons relating to the remuneration of Members for the time being in force, is or was payable to him as a Member holding the qualifying office which he then held, and

• (b) the amount which, in accordance with that resolution, is or was the amount of a Member's ordinary salary.

• (4) No sums shall be deducted under this section from any salary payable to a person who has at any time (whether before or after the passing of this Act) been Prime Minister and First Lord of the Treasury, Speaker of the House of Commons or Lord Chancellor.

• (5) If any salary from which a deduction is required to be made under this section is not drawn, there shall be set aside, out of moneys available for the payment, a sum equal to the relevant deduction, and any sum so set aside shall be dealt with as if it were a sum so deducted.

• (6) In this section (except in subsection (3)(b)) " salary " means salary payable to the holder of a qualifying office in respect of his tenure of that office.

Exchequer contributions

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• (1) In respect of the year which began on 1st April 1972 (in this section referred to as " the initial date "), and in respect of each year beginning with an anniversary of that date, an Exchequer contribution, of an amount calculated in accordance with the following provisions of this section, shall be paid into the Fund out of moneys provided by Parliament.

• (2) As soon as practicable after the passing of this Act the Government Actuary shall make a report to the Trustees and to the Minister for the Civil Service on the general financial position of the Fund as at the initial date ; and as soon as practicable after the commencement of the period of three years beginning with the third anniversary of the initial date, and of each succeeding period of three years, the Government Actuary shall make a report to the Trustees and to the Minister for the Civil Service on the general financial position of the Fund as at the commencement of the period of three years in which the report is made.

• (3) The first of the reports to be made by the Government Actuary under this section shall include his recommendation as to the annual rate at which Exchequer contributions should be paid under this section; and each subsequent report of the Government Actuary under this section shall include a like recommendation, either—

• (a) continuing in force, for the whole of the period of three years to which the report relates, the recommendation in force immediately before the commencement of that period, or

• (b) superseding that recommendation by a different recommendation for the whole of that period, or

• (c) continuing that recommendation in force for the first, or the first and second, of the years comprised in that period and superseding it by a different recommendation for the remainder of that period.

• (4) Any annual rate specified in a recommendation of the Government Actuary under subsection (3) of this section shall be expressed in terms of an amount to be calculated by multiplying aggregate sums deducted from salaries under sections 3 and 4 of this Act by a specified figure ; and in the next following subsection " the specified figure ", in relation to any such year as is mentioned in subsection (1) of this section, means the figure (whether being a whole number or not) specified in such a recommendation which (in accordance with the last preceding subsection) is in force for that year.

• (5) The annual amount of the Exchequer contribution to be paid under this section, in respect of any such year as is mentioned in subsection (1) of this section, shall be an amount calculated by taking the aggregate of the sums deducted from salaries in respect of that year under sections 3 and 4 of this Act and multiplying that aggregate by the specified figure.

• (6) Any reference in this section to sums deducted from salaries under sections 3 and 4 of this Act shall be construed as including a reference to any sum which, by virtue of any provisions of either of those sections, is to be treated as, or dealt with as if it were, a sum deducted thereunder.

• (7) A copy of every report made by the Government Actuary under this section shall be laid before the House of Commons.

Reckonable service

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• (1) Subject to the next following subsection and to sections 18(6), 21(4) and 22 of this Act, for the purposes of this Act—

• (a) any period before 16th October 1964 during which a person was a Member of the House of Commons, and

• (b) any period beginning on or after 16th October 1964 during which a person was or is such a Member, whether before or after the passing of this Act,

is a period of reckonable service as a Member; and in this Part of this Act " aggregate period of reckonable service as a Member ", in relation to a person, means the period, falling within either of the preceding paragraphs, during which he is or was such a Member or (if more than one) the aggregate of such periods.

• (2) For the purposes of the application of the preceding subsection to any person—

• (a) any such period as is mentioned in paragraph (a) of that subsection shall be disregarded unless he was or is a Member of the House of Commons at some time on or after 16th October 1964, whether before or after the passing of this Act, and

• (b) if his period of service falling within that paragraph, or the aggregate of such periods, exceeds ten years, the excess shall be disregarded.

• (3) Subject to sections 18(6), 21(4) and 22 of this Act, for the purposes of this Act any period which, in the case of a person, is a period of tenure of a qualifying office in respect of which he has elected to be a participant under section 2 of this Act is a period of reckonable service as an office-holder; and in this Part of this Act " aggregate period of reckonable service as an office-holder ", in relation to a person, means his period (or, if more than one, the aggregate of his periods) of reckonable service as an office-holder.

• (4) In this Part of this Act " aggregate period of reckonable service (whether as a Member or otherwise)", in relation to a person, means whichever of the following is applicable to him, that is to say, his aggregate period of reckonable service as a Member or his aggregate period of reckonable service as an office-holder, or, if both are applicable to him, means the first-mentioned of those periods together with so much (if any) of the other period as does not coincide with any part of the first-mentioned period.

Pensions of Members

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• (1) Subject to the provisions of this Act, a person who on or after 1st January 1972 (whether before or after the passing of this Act) has ceased to be a Member of the House of Commons shall be entitled to receive a pension under this section as from the time when the following conditions are or were fulfilled in respect of him, that is to say—

• (a) he is or was neither a Member of that House nor a candidate for election to it;

• (b) he is not or was not the holder of a qualifying office;

• (c) his aggregate period of reckonable service (whether as a Member or otherwise) is not or was not less than four years; and

• (d) he has or had attained the age of sixty-five years.

• (2) No pension shall be payable under this section to a person who has been Prime Minister and First Lord of the Treasury or Speaker of the House of Commons or who is or has been Lord Chancellor.

• (3) Subject to subsection (4) of this section and to sections 8, 11 and 31 of this Act, the annual amount of the pension payable to a person under this section shall be a sum equal to the aggregate of the following amounts, that is to say—

• (a) an amount equal to one-sixtieth of the relevant terminal salary multiplied by the number of complete years comprised in his aggregate period of reckonable service as a Member, and

• (b) an amount bearing the same proportion to one-sixtieth of the relevant terminal salary as the number of days comprised in that period after the end of the last complete year comprised in it bears to three hundred and sixty-five.

• (4) Where on or after 1st January 1972 (whether before or after the passing of this Act) a person has ceased to be a Member of the House of Commons and the conditions specified in paragraphs (a) to (c) of subsection (1) of this section are fulfilled in relation to him, and he has attained the age of sixty years but has not attained the age of sixty-five years, then if—

• (a) he applies to the Trustees for an immediate pension under this section, and

• (b) the Trustees are satisfied that he does not intend to stand for re-election to the House of Commons,

he shall be entitled to receive a pension under this section as if he had attained the age of sixty-five years on the date on which he ceased to be a Member of the House of Commons; but the annual amount of the pension to which he is so entitled, both before and after he attains the age of sixty-five years, shall (subject to sections 8, 11 and 31 of this Act) be an amount calculated in accordance with subsection (3) of this section, reduced by such amount as the Government Actuary determines to be appropriate, having regard to the length of the period beginning with the date on which he ceased to be a Member and ending with the date on which he would attain the age of sixty-five years.

• (5) In this section " the relevant terminal salary "—

• (a) in relation to a person who has been a Member of the House of Commons for a period of not less than twelve months, or for two or more periods amounting in the aggregate to not less than twelve months, means the amount of a Member's ordinary salary for the last twelve months (whether continuous or discontinuous) during which that person was a Member of that House, and

• (b) in relation to a person who has been a Member of that House, but whose aggregate period of service as such a Member was less than twelve months, means an amount calculated by taking the aggregate amount of a Member's ordinary salary for the period (whether continuous or discontinuous) for which he was such a Member and multiplying it by the appropriate figure;

and in paragraph (b) of this subsection " the appropriate figure " in relation to a person, means the figure (whether being a whole number or not) by which the number of days comprised in his period of service as a Member of the House of Commons must be multiplied in order to be equal to twelve months.

Alternative calculation of pension by reference to Act of 1965

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