MPs should ditch their gold-plated pension arrangements and move to a defined contribution (DC) scheme, Saga director-general Ros Altmann says.
Altmann (pictured) said MPs' pensions are "virtually the most generous in the country" with taxpayer contributions amounting to more than £25,000 a year.
She said: "I suggest an alternative approach for MPs' pensions. A pension contribution of £25,000 a year should be added to MPs' base salaries, and paid into a new DC [scheme] replacing the current defined benefit scheme.
"This would help MPs better understand the issues facing the majority of the population who will only have DC pensions. So far, MPs have been cushioned from the pension changes affecting most private workers."
MPs currently contribute to a fully-funded defined benefit scheme, the Parliamentary Contributory Pension Fund, at either a 1/40th accrual rate with a contribution of 13.75% of their salary, a 1/50th accrual rate at 9.75% or a 1/60th accrual rate at 7.75%.
All levels of accrual are then met by a contribution from the Treasury coffers of just over 20%.
But veteran Conservative frontbencher and former MP Ann Widdecombe said the scheme was not a drain on the taxpayer.
She said: "It is generally not appreciated by the public that the MPs' scheme is a funded one unlike vast swathes of the public sector which are simply underwritten by the taxpayer; and many MPs, as did I, bring in money from other schemes when we are elected to Parliament after many years work outside it.
"MPs' pensions are therefore not the drain on the taxpayer which many other public sector schemes are. I would therefore be perfectly happy for the scheme to continue as it is."
Following the MPs' expenses scandal in 2009, control of the scheme was passed to the Independent Parliamentary Standards Authority which is reviewing MPs' pay and pensions before coming to a decision on their structure in spring 2013.
The body introduced a temporary freeze on increases in MP's pension contributions at 1.85% this year.
The 20% contribution from the Treasury contrast sharply with the terms of auto-enrolment, where workers across the country will be auto-enrolled into DC schemes with a minimum 1% employer contribution before being escalated to 3% by 2018.
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