UK - Shadow social security minister David Willetts has written to his counterpart in Government to express his serious concern at the reliability of pension fund figures endorsed by social security minister Alistair Darling.
The full text of the letter reads:
“As you know, I am concerned about the reliability of the figures for pension fund assets in the statistics on insurance companies’, pension funds’ and trusts’ investment (MQ5). This series was recently withdrawn by the Office of National Statistics because of the errors which we identified and raised in the Commons on Monday, February 4. “I believe that the figures for contributions into pension funds, which you endorsed at oral questions on Monday, are also untrustworthy. “A parliamentary answer from Ian McCartney to me on November 23, 2001 (column 534W) stated that pension fund contributions amounted to £69bn (1997 prices) during 2000, up by £19bn from the figure for 1997. Ian McCartney quoted this figure again in the House last Monday and you endorsed it on Monday this week.
“We know from more reliable figures that around £14bn was contributed to self-administered occupational pension funds in 2000. For the £69bn figure to be correct, contributions to insured and personal pensions, which cover many fewer people than occupational pensions, are claimed to be approximately £58bn. These figures are highly dubious. (The small difference between the two sets of figures is due to the fact that one is in 1997 terms and one is in current terms.) “A clue to the source of the apparent error comes from figures produced by the Association of British Insurers which are enclosed. The ABI don't need to use sampling as ONS do, so their data seems likely to be accurate and when an unusual trend, such as this, emerges, it is relatively easy for them to spot it and attribute it, which they do in the footnote which says: ‘The large increase in single premium pensions from 1997 is due to the high volumes of managed pension fund business (ie institutional pension funds) written by insurance companies and subsidiaries of investment houses primarily writing this type of business.’ “You will note that single premiums to insured group pension arrangements have increased more than eight-fold between 1995 and 2000. Many of these premiums are not new flows into pension savings. Instead they are shifts of assets out of other forms of pension investments by self-administered pension funds. Including them would artificially inflate your figures for contributions to insured pensions.
“I suspect therefore that the answers which you and Ian McCartney have given in the House have inadvertently included such changes in investments as net new contributions to pensions.
“Given that the MQ5 series on which the parliamentary answer was based have been withdrawn, I would be grateful if you could also withdraw the parliamentary answer on pension contributions as well and, in accordance with the Ministerial Code, publish the correct figures as soon as possible.”
A spokesman for the Department for Work and Pensions said: “Mr Darling will respond to the letter from Mr Willetts in the normal way correspondence is dealt with.
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