Mr. Seamus McCarthy:

My understanding is that the actuaries would look back over a long period as well. They would be looking back over what the increase has been over 20 years and then projecting forward. It is something of a concern for me. These assumptions are relatively standard. There is some variation and there is no particularly obvious reason there would be variation. There should be standard assumptions used and the assumptions should be based on a reasonable expectation of what is likely to occur in the future. Certainly, in the current climate, one would question the idea that in the long term there will be a 3.5% increase in pensionable salary where one is talking about a 1.5% real increase and 2% inflation over the projection of 20, 30, 40 or 50 years. It is something to which I drew attention in relation to the Social Insurance Fund projections. It is probably something we will talk about on another occasion.

There is an issue. There may be an element of overstatement of pension liabilities but we are satisfied that the authority has followed FRS17 correctly.