asked the Minister for the Civil Service if he will list those parts of the public sector which have unfunded pensions schemes and which have funded pension schemes; and what the effect on public expenditure would be in 1980–81if funded schemes were replaced by unfunded schemes on a pay-as-you go basis.
1 have been asked to reply.The information for the main categories of public sector employees is as follows:
Unfunded schemes
- Civil Service
- Armed Forces
- Fire Service Police
Notionally funded schemes*
- Teachers
- National Health Service
- Atomic Energy
Funded schemes
- Local Authorities (excluding teachers, and Police and Fire Services)
- Nationalised Industries and other statutory corporations
Any estimate of the quantative impact on public expenditure of switching the funded public sector schemes over to pay-as-you-go (PAYG) depends crucially on the assumptions made about the form of the PAYG system adopted and the resultant pattern of effects on pensions contributions, prices, wages, pensions and taxation. Paragraphs 52 to 57 of the evidence by the Government Actuary (GA) to the Wilson committee provide some indication of the orders of magnitude involved in altering the basis of funded public service and nationalised industry pension schemes.
* Employer and employees' contributions computed by the Government Actuary with reference to a notional fund invested in Government securities.