Dáil Éireann Debate, Tuesday - 19 June 2012
267 Deputy Terence Flanagan asked the Minister for Public Expenditure and Reform the most recent total estimate of the public sector pension liabilities and when it is planned to update this number; and if he will make a statement on the matter. [29860/12]
Amharc ar fhreagraThe gross accrued liability for public service occupational pensions is estimated at €116bn as of December 2009. This estimate is set out in the Annual Report of the Comptroller and Auditor General published in 2010. This figure was arrived at on the basis of a detailed actuarial valuation of public service pension schemes carried out by consultants employed by the C&AG in the light of the pension terms and conditions then prevailing. Since 2008 the Finance Accounts, published annually by the Department of Finance, also show the gross accrued liability figure. I would add that the term public sector is usually taken to comprise all those who are employed, both directly and indirectly, by a public body. The public service is, broadly speaking, the public sector less the commercial semi-state bodies.
This accrued liability figure of €116bn is a single monetary amount representing the present value of all expected future superannuation payments to current staff and their spouses in respect of service to date, plus the full liability for all future payments to current pensioners (including preserved pensioners) and to their spouses. The large size of the figure is due to the fact that it represents a projection of aggregate pension payments that will be spread over 70 or more years into the future.
The estimate of the accrued liability should not be confused with the actual cash funding that will be required in the future. This latter, measure of public service pension costs is the actual annual gross outgoing on public service pensions which comprises the Exchequer Pensions Bill and certain other public service pension outlays, principally local government pensions. In 2011 the Exchequer Pensions Bill was estimated to have been €2.8bn, or 2.2% of GNP.
It is important to point out that a new Single Public Service Pension Scheme Bill, to apply to all public service staff, is currently before the Oireachtas, and it is intended that the new scheme will be implemented this year. The new Scheme will provide for pension to be based on career average earnings, as opposed to the current system of pension based on final salary. This and other features of the Scheme will eventually deliver a saving of a third in the Exchequer Public Service pension bill. Once these new arrangements come into force consideration will be given to carrying out the large scale actuarial exercise that would be necessary to update the accrued liability figure.
