Richard Bruton (Dublin North Central, Fine Gael)
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Question 190: To ask the Taoiseach if the Central Statistics Office has determined the way the proposed transfer of funds from pension funds of certain non-commercial State sponsored bodies to the Exchequer would be treated in the Government accounts in that the move adds both liabilities and assets to the Exchequers position; and if the EU have been asked to comment on the impact on the general Government deficit. [30333/08]

Pat Carey (Dublin North West, Fianna Fail)
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The CSO has not to date been formally asked to determine the treatment in the Government Accounts of the transfer of the assets of funded pension schemes of Non-Commercial State-Sponsored Bodies (NCSSBs) to the State in return for the Government assuming responsibility for future pension payments to beneficiaries on a pay-as-you-go basis.

The Government Accounts and General Government Balance (GGB) are calculated according to the accounting rules of the European System of Accounts (ESA95), as supplemented by the Eurostat Manual on Government Deficit and Debt (MGDD). The rules in this system for recording pension fund transfers are complex, but in general the transfer of the pension fund's assets to the State may be recorded as a receipt in the Government Accounts if: a) the transferring agency is classified outside of the General Government sector (i.e. if it is not controlled by Government or if it covers more than 50% of its costs from its own resources — according to these criteria, most NCSSBs are classified within General Government but some non-profit institutions, including universities, are classified outside), OR b) the transferring agency is classified within the General Government sector, but the pension scheme is established as a trust, legally separate from the agency.

The accounting rules do not recognise an up-front liability for the obligations accrued in the case of pay-as-you-go pension schemes, so no counterpart is recorded to this revenue and the initial up-front GGB impact is positive.

This initial revenue would be offset in the future by the payment of the pension benefits, which would be recorded as Government expenditure at the time of payment. In the longer term the impact on the GGB would therefore be expected to be neutral, provided the scheme is fully funded.

Given the complexity, the CSO would have to determine the treatment of any pension fund transfers on a case by case basis. Generally, Eurostat would only be consulted if a particular scheme was very complex and the accounting treatment was not fully clear. The Government Accounts and the calculation of the GGB are, of course, subject to Eurostat approval so any accounting treatments adopted could subsequently be subjected to Eurostat examination.