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Last Updated: Monday, 19 June 2006, 23:24 GMT 00:24 UK
Public sector pension scheme fear
The cost of pensions is in danger of overtaking the cost of running the fire service
The cost of fire service pensions is a major concern
Scotland's public spending watchdog has identified a growing shortfall in the pension schemes of nearly one million public sector workers.

Audit Scotland said the gap was growing between the money in schemes and the amount they may have to pay out.

The report by Auditor General Robert Black warned that the difference could be as high as 53bn.

The Convention of Scottish Local Authorities (Cosla) said the local government pension scheme was "strong".

In the fire service, the growing cost of pensions was in danger of overtaking the cost of running the service, Mr Black's report warned.

The report examined the six main public sector pensions schemes covering 950,000 people in Scotland, where nearly a fifth of the population has some entitlement to a public sector pension.

Robert Black
The funding shortfalls and unfunded liabilities of public sector pension schemes in Scotland are increasing
Robert Black
Auditor General

The level of "unfunded liabilities" in the five main schemes administered in Scotland may be as high as 43bn.

This figure excludes the main civil service scheme which is administered at UK level.

"If the civil service scheme is included, the unfunded liability for Scotland may be about 53bn," said Mr Black.

He added: "The funding shortfalls and unfunded liabilities of public sector pension schemes in Scotland are increasing.

'Totally unrealistic'

"The contributions from both employees and employers will almost certainly increase and there are likely to be demands on future public spending to meet these costs."

Cosla president Pat Watters sought to dismiss pension scheme fears.

"It is totally unrealistic that everyone in the scheme will retire on the same day, live to the same age, and die on the same day, and this is the only way that the liability in the report would become a real and meaningful figure," he said.

"The fact is that the local government pension scheme is both strong and extremely well-managed with 216,000 members contributing and valuations every three years."

Scottish National Party finance spokesman John Swinney said the report highlighted a significant gap in public sector pension funding.

Scottish Tory finance spokesman Derek Brownlee said: "We must strike a proper balance between the cost to taxpayers of public sector pensions and the pension promises already made to public sector workers."

Taxpayers and council workers would understandably be concerned, he added.




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