The Local Government Pension Scheme in England could now total £100 billion, according to new research from an independent pension consultant.
John Ralfe’s survey of local authorities’ accounts found that the deficit may have more than doubled in the past three years from £42 billion in 2007, and is now equal to around 7% of the UK’s annual economic output.
The pension scheme has four million members in England, including 1.7 million current workers.
Joanne Segars, chief executive of the National Association of Pension Funds (NAPF), said:“Public sector pension deficits rightly get a lot of attention. However, it is essential we do not forget that pension benefits are paid over the long-term and liabilities stretch over many decades. We should not get too excited by this particular snapshot.
“Within each part of the Local Government Pension Scheme, there are clear plans in place to reduce deficits over time. Local government has billions of pounds worth of investments set aside to fund the scheme.
“The measure of liabilities used in this survey creates an extreme snapshot, but many pensions experts do not think it is the best calculation to use.
“The Treasury and the Public Sector Pensions Commission are currently looking at how best to measure the long-term costs of public sector pensions and the best way to reform schemes to make sure they are affordable.”
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