Source · Select Committees · Public Accounts Committee
Recommendation 27
27
Accepted
Reduction in WGA pension liabilities reflects actuarial assumptions, not real financial gain.
Conclusion
We received written evidence from the ICAEW which states that the significant reduction in pensions liabilities presented within the 2022–23 WGA is the most significant change in the balance sheet for the government, and is primarily due to actuarial assumptions, particularly discount rates. It stressed that such a reduction does not represent a windfall to the exchequer, as it does not impact pension entitlements in cash terms. The actual obligation for the government to pay future pensioners continues to increase, with £116.6 billion added to future entitlements during 2022–23.61
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.