Ulick Burke (Galway East, Fine Gael)
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Question 96: To ask the Tánaiste and Minister for Finance his estimate of the deferred liability of pension commitments under social welfare provisions, assuming the maintenance of existing ratios to average earnings and the achievement of targets suggested as desirable; and the way this impacts on the adequacy of the National Pensions Reserve Fund provision. [2080/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy will recall that projections of future pension liabilities were published in the Government's Green Paper on Pensions last October. These indicate that the cost of Social Welfare pension provision will increase from around 31⁄2% of GDP to over 10% by 2050. This primarily follows from the ageing of our population.

The National Pensions Reserve Fund (NPRF) was established under the National Pensions Reserve Fund Act 2000 with the objective of pre-funding in part the future Exchequer cost of Social Welfare and Public Service pensions. The legislation requires that 1% of GNP be paid every year from the Exchequer into the Fund until at least 2055. The amount being paid into the Fund this year is just under 1690 million euro. The estimated value of the National Pensions Reserve Fund, as published with the National Treasury Management Agency's Preliminary Results for the year 2007, was 21.3 billion euro at 26 December 2007.

As the Deputy will appreciate, it was never the intention that the Fund would cover the full cost of Social Welfare and Public Service pensions. As envisaged from the outset, the assets accumulated in the NPRF will go some way towards easing future funding concerns, but will fall short of projected pension liabilities.

A range of measures that could help address the challenges we face in meeting pension commitments are discussed in the Green Paper. The consultation process currently under way provides an opportunity to consider these in detail.

I might add that the National Pensions Reserve Fund Act 2000 provides that the National Pensions Reserve Fund Commission shall commission, from time to time, assessments of the projected profile of Exchequer outlays on Social Welfare and Public Service pensions, after consultation with the relevant Ministers.