State pension burden 'massively understated'
The government has being accused of massively understating the future burden of unfunded public sector pensions in figures prepared for the Whole of Government Accounts.
Link: FRS 17 special report
Shadow chief secretary Howard Flight has put a series of questions down in the Commons demanding official figures at a series of different discount rates to meet FRS17 accounting standard and is demanding chancellor Gordon Brown explain why he decided to publish figures without explanatory notes.
Flight said the Treasury had produced a figure of £250bn but made it clear he believed this was at the lower end of the range, warning that if ministers used ‘the real rate of interest on government index-linked gilts’ the figure ‘will be substantially larger and could approach £500bn’.
He warned: ‘The public is unaware of the massive under-funded public sector pension liability resulting from a large increase in public servants, including doctors and teachers.’