12 March 2010
Full report: The cost of public service pensions
There has been much public discussion about the affordability of public service pensions. To inform that debate, the National Audit Office has today published a report designed to bring greater transparency to, and understanding of, the cash costs involved. Today’s report found:
Today’s report also looked at projections of payments across all UK public sector pay-as-you-go pension schemes over the next fifty years. The report found:
Estimates of future payments depend on assumptions (covering matters such as life expectancy, earnings growth, the size of the public sector workforce and recent changes to contain costs) used as the basis of calculations. Changes to these assumptions can have a large impact on the projections. The Treasury has a reasonable framework in place for assessing future costs and has undertaken some analysis on the sensitivity of projections to changes in key assumptions. However, the Treasury has not undertaken any systematic analysis of the effects of changing its assumption that there will be zero public service headcount growth, despite the existence of several factors that could put upwards pressure on staff numbers in the long term.
The NAO will publish a second report later this year examining the impact of recent changes on the overall cost of the UK public service pay-as-you-go pension schemes.
Array, 12 March 2010