Public service pensions - government is hiding the true cost

Liabilities estimated at £1,071 billion

In a new report for the Institute of Economic Affairs*, economist Neil Record** shows how the government is using an artificial interest rate to depress the apparent annual cost of public sector pensions, and also failing to report fairly and on time its outstanding liabilities to its pensioners.

Government Treatment of Public Sector Pension Liabilities

No figures have been published on total occupational pension liabilities for two years running – breaking a well-established convention. The government has finally used a more realistic discount rate to value the liabilities of individual schemes, although it still does not apply the international standard for government accounts (IPSAS 25: employee benefits). As far as can be seen from published f