§ Mr. Gregory
To ask the Chancellor of the Exchequer what is the level of underfunding in total, and expressed per public service pensioner, of the public sector pension bill as a result of the miscalculation of the retail prices index; what is the number of public service pensioners 365W involved; what estimate has been made of the administration costs if the underfunding were to be distributed to each pensioner; and if he will make a statement.
§ Mr. Brooke
The underestimation of the retail prices index led to payments to public service pensioners in the main superannuation schemes which the Government administer centrally (teachers, National Health Service, Civil Service, armed forces, and colonial pension schemes) being £7.2 million lower in total than they would otherwise have been, an average of £5.70 for each of the 1,263,000 pensioners in these schemes. The administrative cost of compensating each pensioner would have amounted to over £2.6 million, or more than a third of the total amount of compensation to be disbursed. These estimates underly the decision, announced in my answer of 18 December 1987, at columns845–46, to make donations to charities, including those active in support of retired or needy public service pensioners, instead of compensating pensioners individually.