UK - "Fictitious surpluses" to boost government funds from two of the UK's largest pension funds were calculated by a heavily criticised government actuary, an independent consultant claims.
At the privatisation of the British Coal Corporation in 1994, both schemes were closed to new members, however, both the pension fund and the government agreed the government would become the ultimate guarantor and sponsor.
In order to assume that responsibility, an arrangement was put in place that the government would receive a 50% share in subsequent surpluses with the schemes' members sharing the rest in the form of an annual bonus.
The consultant said that in the past two years, the government had received £1bn in surpluses and the total payout since 1997 had risen to £3.5bn.
Global Pensions has learned the government actuary who calculated the surplus is the same actuary who was heavily criticised by the Parliamentary Ombudsman in its recent report on Equitable Life.
Ralfe said the funding the government had been receiving had been made from "fictitious surpluses" and is concerned taxpayers will inevitably be forced to foot the bill.
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