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Departmental Pensions

Volume 475: debated on Monday 28 April 2008

To ask the Secretary of State for Communities and Local Government (1) what her most recent estimate is of the unfunded liability in present value terms of each public sector pension scheme for which her Department is responsible; and on what assumptions for (a) discount and (b) longevity the estimate is based; (200736)

(2) what the unfunded liability in present value terms was of each public sector pension scheme for which her Department is responsible in each year since 1990-91;

(3) what the (a) rate and (b) cost was of employer contributions for each public sector pension scheme for which her Department has responsibility in each year since 1990-91; and if she will make a statement.

The 89 local authority pension funds that comprise the Local Government Pension Scheme in England and Wales are valued by actuaries every three years. The most recent valuation took place in March 2007 but the national outcome will not be known until later in the year. Details of individual fund valuation results, including new employer contribution rates and the assumptions used for discount and longevity can be obtained directly from each scheme administering authority.

When the funds were last valued in 2004, this showed that the assets of £80 billion represented some 75 per cent. of the total scheme liabilities of £107 billion. Each scheme administering authority has in place a funding strategy to manage and recover to ensure the on-going solvency of the scheme. Valuation results for English and Welsh local authorities participating in the scheme are available at

www.xoq83.dial.pipex.com/actvale.pdf

and

www.xoq83.dialpipex.com/valwal.pdf

The pension liability for the two firefighters' pension schemes falls on individual fire and rescue authorities. The current unfunded liabilities are estimated to be about £18 billion for English authorities.

The 1992 Firefighters' Pension Scheme has an employer contribution rate of 22 per cent. of payroll; the 2006 New Firefighters’ Pension Scheme's rate is 11 per cent. The estimated costs for employers in the two schemes are:

£ million

1992 scheme

2006 scheme

2006-07

193.9

2.8

2007-08

194.6

8.9