Brian Lenihan Jnr (Dublin West, Fianna Fail)

The latest estimate for the accrued liability for public service occupational pensions is €75 billion as of 2007. This accrued liability figure 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 and to their spouses. It includes those liabilities relating to pension funds transferred to the National Pension Reserve Fund under the Financial Measures (Miscellaneous Provisions) Act 2009. 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 perhaps 70 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. The more immediately relevant measure of public service pension costs is the actual annual outgoing on pensions, which amounted to approximately €2.5 billion in 2008 or 1.3% of GDP. This annual outgoing is projected to rise to 2.5% of GDP by 2050, almost doubling. The projected increase arises from the growth in public service employment in the past and from increasing longevity.

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