IRELAND - Brian Cowen, the Irish finance minister, has confirmed public sector pension liabilities are estimated to have reached €75bn in 2007.

Cowen admitted in a written answer to a request from Joan Burton, Labour TD's finance spokesperson, for an analysis of public sector pension liabilities for 2006 and 2007 in accordance with the accounting standard IAS19, IAS19 is "not used in the public service".

However, he confirmed an "exercise has been carried out to estimate the accrued liability for public service occupational pensions", and that as of 2007 the liability for all serving and retired public servants was "estimated at €75bn".

Cowen also revealed the mortality assumption underlying the estimate is "based on a special mortality table which was considered appropriate for use in forecasting pension costs for public servants" - which predicts a life expectancy of 22 years for a 65-year-old male.

In the same session Cowen - who, as the new leader of the Fianna Fail party, is expected to become the next Taoiseach in the elections on May 7 2008 - revealed the fund value of the National Reserve Pension Fund (NPRF) at the end of 2006 was €18.9bn.

The NPRF was established in 2001 to meet as much as possible of the social welfare and public pension cost from 2025 to 2055, and currently 1% of the GNP of Ireland is paid into the fund each year.

However, in answer to a question about the possibility of increasing liabilities following improvements in life expectancy, Cowen stated contributions to the fund from the Exchequer would not increase "at this time".

He admitted in his replies he was "aware" and accepted the appropriate investment strategy for a long-term fund "can involve occasional short-term volatility", although he refused to specify what impact the current market volatility has had on the short-term performance of the fund.

Instead, he referred to the NPRF Commission's 2006 annual report, which stated "the Fund's long-term investment horizon enables it to accept this volatility in a trade-off for the higher expected return".

Meanwhile, the finance minister also rejected the idea of introducing a new savings incentive scheme to help encourage saving among welfare dependent and low-income families.

He said while the suggestion for developing a savings scheme similar to the recent Special Savings Investment Accounts (SSIA)  "may have some socially-progressive features" Cowen claimed he was "not convinced that it is the best way forward to address issues relating to welfare dependency and low income families".

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email