§ Mr. Hordern
asked the Chancellor of the Exchequer if he will estimate the savings to the Exchequer if pensions of employees of (a) nationalised industries and (b) local authorities were paid as they arose and not through funded schemes, with present funded schemes being frozen.
§ Mr. Hayhoe
Public expenditure would not be affected by changes in pension schemes for nationalised industry employees because in general these schemes do not involve direct public expenditure. These funds are the responsibility of the industry and the pension fund trustees, and the Government have no responsibility for their operation.674W
In respect of the local authorities, on the basis that the frozen funds would continue to pay the benefits accrued on past service, there would be an initial saving in the contributions currently paid to the funds. This would diminish as the liability for future service built up and eventually pay-as-you-go would become more expensive because of the lack of pre-funding. The effect on the Exchequer would depend upon the nature of the arrangements made.