Source · Select Committees · Public Accounts Committee
Recommendation 25
25
Accepted
Public sector pension liability changes lack distinct breakdown of discount rate impact.
Conclusion
The net public sector pension liability also reduced, from £2,639 billion at the end of 2021–22, to £1,415 billion at 31 March 2023 due to changes in underlying actuarial assumptions, including the changes to the discount rate.56 However, it is not possible to separately see the impact of the discount rate from other actuarial assumptions (such as life expectancy of future retirees and assumptions such as predicted pay increases for workers in future) that change each year.57
Government Response Summary
The government agrees to improve the 2023-24 WGA performance report by publishing undiscounted data, including long-term trend analysis of significant assets and liabilities, and reviewing the presentation of discount rate information (July 2025).
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2025 5.2 One of the important principles of WGA is that it summarises and presents information already in the public domain. It is correct that departmental accounts should be the first place where information relevant to departmental finances are published, with WGA acting as an opportunity to aggregate, summarise and analyse trends. Where undiscounted data is available it will be published in the WGA performance report. 5.3 The 2023-24 WGA performance report will include long term trend analysis of significant assets and liabilities. Where possible updates on how government seeks to manage liabilities will be provided. Linkages between discount rate information in different parts of the Performance Report and Accounting Notes will be reviewed in the 2023-24 WGA to streamline the content. 5.4 Accounting standards require disclosure of significant assumptions and sensitivities as part of the notes to the financial statements. These include sensitivity analysis for other key assumptions: rate of increase in pensions, rate of increase in salaries or life expectancy in retirement.