Teachers' Pension Scheme (Northern
Ireland): Excess on Request for Resources A
3. The Committee have considered the Comptroller
and Auditor General's Report on the Excesses in the accounts of
the Teachers' Pension Scheme for 2003-04. The net Resource Excess
of £122.241 million against the Request for Resources (Providing
for the payment of pensions, lump sums and premature retirement
compensations to persons covered by the Teachers' Superannuation
Scheme) occurred because of a failure properly to estimate pension
provisions.
4. 2003-04 was the first financial year in which
the requirements of Financial Reporting Standard 17 (FRS17 - Retirement
Benefits) were implemented in full. This standard requires the
Scheme accounts to include provisions for future pension liabilities
both for existing Scheme members and those newly transferring
into the Scheme. However, shortcomings in the procedures used
by the Department of Education to support the Estimate process
meant that pension scheme liabilities were not accurately quantified.
There was a miscalculation of £104.6 million in the amount
of prior period adjustment recording the net increase in Superannuation
liabilities in 2001-02 and 2002-03.
5. Additionally,
a revised Scheme valuation, received in July 2004, increased Scheme
liabilities by £14.4 million and outgoings were some £3.9
million higher than expected. This took the overall Excess of
resources to £122.9 million. It is proposed to apply excess
Accruing Resources of £0.684 million partly to offset the
resource Excess, leaving an amount of £122.241 million to
be granted by way of an Excess Vote.
6. The Scheme managers have taken steps to minimise
the risk of similar problems recurring in the future. The Department
of Education will ensure that all necessary information for the
estimates process is obtained and its implications appreciated.
The Department will also contact the Scheme Actuary to see if
estimates of future changes in liabilities can be obtained in
advance of Supplementary Estimates being prepared. These actions
are also intended to ensure that any future period adjustments
reflect the appropriate requirements.
