Joan Burton (Dublin West, Labour)
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Question 130: To ask the Minister for Finance his views on the estimate provided by the Comptroller and Auditor General in their recent annual report that the total public sector pension liability is in the order of €108 billion; and if he will make a statement on the matter. [32387/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The latest estimate for the gross accrued liability for public service occupational pensions is €108 billion as of December 2008. This estimate is set out in the recent annual report of the Comptroller and Auditor General. 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. 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 gross outgo on pensions, which is expected to amount to 1.6% of GNP in 2009. The latest forecast is for this outgo to rise to 2.4% of GNP by 2023. The projected increase arises from the growth in public service employment in the past and from increasing longevity.

The 2008 Finance Accounts, to be published shortly, will include the estimate of €108 billion for the total liability of public service occupational pension schemes as at 31 December 2008. The derivation of the accrued liability figure follows the approach set out in the new accounting standard issued by the International Public Sector Accounting Standards Board, IPSAS 25.