Public accounts figures set to be released by the Treasury this week will include a new net public sector pension deficit figure, according to reports.
The Financial Times reports that on Wednesday, the Government will unveil figures which also contain data on the future liabilities of pensions for teachers, police and NHS workers, which is expected to add between £800bn and £1.2trn to current Government liabilities.
Hargreaves Lansdown pensions analyst Laith Khalaf says: “The cost of public sector pensions has been hidden and downplayed for too long so greater transparency is welcome.”
The new approach, known as ‘whole of government accounts’, is intended to put government bookkeeping on the same footing as companies and it will also see the future costs of private finance initiatives included in the data. The figures are being published to coincide with the Office of Budget Responsibility’s first assessment of the long-term health of the public finances.
The figure is likely to reignite the debate about the cost and sustainability of public sector pensions after last month saw teachers striking over changes to their pensions which could see them paying more into their schemes for longer.
Khalaf says: “The value of these pensions has also been underplayed. More needs to be done to communicate more effectively at a scheme level so they can know what it is worth to them, perhaps by having an annual summary of benefits and what they and employers are paying in.”
Last week in the US, the Government Accounting Standards Board put forward proposals to change how public sector pensions are reported, including moving unfunded liabilities to a more prominent position in reports.