by REBECCA PAVELEY, Daily Mail
MPs have awarded themselves a massive pension rise under new rules sneaked through on Monday.
Their pay-outs - partly funded by the taxpayer - will climb by 25 per cent.
The details were released just as Gordon Brown was unveiling his three-year spending review.
The move is a brutal snub to the millions of ordinary people struggling to save for retirement amid the deepening pensions crisis. Both the Treasury and the Department of Work and Pensions warned against the increase.
But the move went ahead - and was quietly revealed by Commons Leader Robin Cook in a written Parliamentary answer.
He disclosed that MPs, who earn £55,118 a year, will see their pension entitlement increase by a quarter with immediate effect.
They currently qualify for a pension of a 50th of their salary for each year of service. This will now rise to a 40th, with almost half the increase funded by taxpayers. The news will provoke fury among workers whose own pension funds have suffered dramatic falls.
Even some MPs have been angered by the deal, announced so late in the Commons term that it was set to pass without discussion.
Lib Dem spokesman Steve Webb demanded an urgent debate. He said: 'It is very hard to argue that we should get such a generous increase when so many constituents are struggling. Even worse, we are asking the taxpayer to subsidise this.
'It's been done in the most clandestine way imaginable, sneaked out on the biggest economic day of the summer.'
Earlier this month Treasury Secretary Andrew Smith urged MPs not to demand such a large rise.
Members voted as long ago as last year to increase their pensions, arguing that the average length of time a member serves in Parliament has dropped in recent years.
Tory John Butterfill, a trustee of the Parliamentary pension fund, said many members had left well-paid jobs for the Commons and needed more security.
The watchdog Senior Salaries Review Board has now recommended the rise should go through.
But it has rejected MPs' demands that the entire bill should be met by the taxpayer through the Treasury.
The Board insisted that MPs must hand over some extra cash themselves.
Their pension contributions will now increase by three per cent - but taxpayers will still have to stump up the equivalent of another two per cent.
Mr Cook said that eventually MPs would have to pay all of the rise. But as pensions arrangements are reviewed only every few years, taxpayers will be footing the bill for some time to come.
Describing the change as a 'sensible compromise', Mr Cook said: 'I believe it fairly recognises the decline in average length of service of MPs, which has had the effect that only a handful of members now achieve the maximum pension entitlement.'
He stressed that the Review Board, which oversees MPs' the salaries, backed the move.
But the boost to the Commons pension fund comes as firms throughout the country are scrapping such final salary schemes, which pay a fixed income according to salary at retirement. They have been replaced by more risky and less generous schemes based on stock market performance.
With the devastating falls in the market, millions of workers now fear retirement poverty. The Treasury has been accused of aggravating the crisis with higher taxes on pension funds.
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