[holding answer 13 September 2006]: The National Insurance system operates on a pay-as-you-go basis with the National Insurance Contributions that people pay funding payments to those currently in receipt of contributory benefits and helping to fund the NHS. Work is ongoing on the detailed implementation of the Pensions White Paper.
The Government intend to bring forward legislation on Pensions Reform during the second session of this Parliament.
The Treasury macroeconomic model is principally a model of the economic activity described and recorded in the National Accounts. As such it does not explicitly include pension deficits that are defined by accounting standards e.g. FRS17. However, in preparing the Pre-Budget Report and Budget forecasts careful consideration is given to the possible economic implications of pension fund deficits for corporate and household behaviour.