Commonwealth War Graves Commission: Pension Fund

Jim Shannon Excerpts

Monday 29th February 2016 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for bringing this matter to the House. The number of Members present in the Chamber is an indication of the importance of the subject. In my constituency, we have between 60 and 70 war graves, which are looked after by the War Graves Commission, and they are very important to us in Strangford. What concerns me is the need to have the pensions and the wages correct across the whole of the Commonwealth, not just in the United Kingdom. Does he think that we should look after those graves in the Commonwealth as well as in other parts of the world?

[Chris Stephens]

I thank the hon. Gentleman for his intervention, and I agree with him.

To recognise the special nature of the job, the loyalty of staff and the financial sacrifices staff have made over the years, the commission has held a final salary pension scheme, ensuring financial security for staff who have spent their lives in dedicated service to the commission. The terms of this scheme are good with a low employee contribution, a spouse’s pension, death in service and lump sums based on final salary—40/60ths. That reflects the fact that the pension has traditionally been one of the most important conditions of service, recognising years of dedication and loyalty.

In December 2014, however, the CWGC announced the intention to close the final salary pension scheme in April 2016 and move staff to a far less favourable defined contribution scheme, the Group Pension Plan. The terms of this scheme are much higher employee contribution, lower employer contribution and less of a pension pot at the end. The changes will see a drastic reduction in the pensions of 180 long-serving staff, with some losing more than £6,000 for every year that they draw their pension. The introduction of the new pension will also see a reduction in employer contributions from the current 22.4% of salary to a limit of “up to 15%”. On average, employer contributions will likely be much lower as the 15% rate can be reached only when employees significantly increase their contributions in turn. That came just two years after the Commonwealth War Graves Commission had closed the final salary scheme to new entrants, promising:

“Closure of the scheme to new members does not have a negative impact on the funding of the existing pension scheme…The current pension scheme remains in a relatively strong surplus position when assets and liabilities are calculated on a long term actuarial basis.”