Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 131: To ask the Minister for Finance the value of the National Pension Reserve Fund; and if he will make a statement on the matter. [25659/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

The National Pensions Reserve Fund (NPRF) was established on 2 April 2001 under the National Pensions Reserve Fund Act 2000 with the objective of meeting as much as possible of the cost to the Exchequer of social welfare pensions and public service pensions to be paid from the year 2025 until at least 2055.

The National Pensions Reserve Fund Commission — who control and manage the fund — publish a report on the performance of the NPRF at the end of each quarter. The most recent such report, to 31 March 2009, valued the fund at €15.5 billion. The Exchequer normally makes its annual contribution to the NPRF in four quarterly instalments. The first payment for 2009, for €396 million, was paid to the NPRF in March and is reflected in the outturn for the first quarter.

Under the Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Act 2009, which allows the Minister for Finance to make payments into the fund where he has given the fund a direction to invest in a listed credit institution, a further payment of €2.604 billion was made to the fund in May, bringing the total paid over from the Exchequer to the fund in 2009 to €3 billion. This reflects the Government decision announced on 11 February 2009 that the recapitalisation of Allied Irish Bank and Bank of Ireland through the purchase of preference shares by the NPRF would be funded by €4 billion of the fund's own resources and €3 billion from the Exchequer through the frontloading of the 2009 and 2010 Exchequer contributions.

The fund's annual and quarterly reports are available publicly on the Commission's website http://www.nprf.ie/home.html. The annual report for 2008 will be available on this website in July.

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 132: To ask the Minister for Finance the estimated outstanding pension liability in respect of all public and civil servants, inclusive of those liabilities relating to the pension funds to be transferred to the National Pension Reserve Fund as proposed under the Financial Measures (Miscellaneous Provisions) Bill 2009; and if he will make a statement on the matter. [25669/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

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 to be 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 meaningful measure of public service pension costs is the actual annual outgo on pensions, which amounted to approximately €2.5 billion in 2008, or 1.3% of GDP. This annual outgo is projected to rise to 2.5% of GDP in 2050. The projected increase arises from the growth in public service employment in the past and from increasing longevity.

The Finance Accounts, to be published shortly, will include an updated estimate of the total liability of public service occupational pension schemes as at 31 December 2008. This figure is being arrived at as part of on ongoing C&AG examination of public service pensions. As part of that examination the C&AG has engaged consultants to carry out a detailed actuarial valuation of public service schemes. The derivation of the accrued liability figure will follow the approach set out in the new accounting standard issued by the International Public Sector Accounting Standards Board, IPSAS 25.