UK Office for National Statistics to rethink 'incomplete' pensions data
UK - The UK Office for National Statistics (ONS) is to re-think the data it provides on pension liabilities after admitting current estimates were "incomplete".
Under pressure to comply with EU guidelines that will mandate more rigorous pensions reporting from 2014, the ONS pensions analysis unit this week published the first of three papers outlining the switch from defined benefit pension calculations based on market value to those based on actuarial assumptions.
Author Sarah Levy told IPE: "Calculating on an actuarial basis is quite a complicated method involving a discount rate, but it is the recommended method for defined benefit liabilities."
In the paper, Levy questioned the use of the term 'liabilities' because it implies debt when in fact it is not unusual for changes to pension scheme rules to mitigate outstanding debt in unfunded pension schemes.
"Pension liabilities are properly defined as 'contingent pension obligations' rather than debt in the Maastricht sense," she said.
There is currently no single repository of data on both pensions balances and transactions, and the fact that aggregated data does not currently exist means there is no way to tell the total value of UK pensions obligations or the ratio of liabilities between the state and the private sector.
A spokeswoman for the ONS said the new approach would not present new data, but would break down existing data to include funded and unfunded pensions liabilities, which are not included in the national accounts.
The ONS is currently in discussions with Eurostat to ensure its interpretation is consistent with EU guidelines.
Levy told IPE: "We're compliant at the moment, but accounting methods are revised often, and we had to make changes to ensure we're compliant in future."
She added: "I can't speak for all the different requirements - there will be extensive changes to the national accounts - but it seems clear that, on pensions, there won't be many changes to those we've already agreed."