Treatment of Pension Schemes in  | View Thread
Properly Treating Activities of Nonautonomous Pension Schemes for Government Employees
David V. Pritchett on 2/13/2003 4:55:51 PM
This paper calls for a proper treatment of nonautonomous pension activities for government employees to facilitate fiscal analysis. Failure to properly classify these data implies continued failure of fiscal data to reveal difficulties where populations are aging. Treating all transactions of these government pension schemes as revenue or expense is misleading. The pension contribution payments from employees, in accord with the Government Finance Statistics Manual 2001 (GFSM 2001) methodology, should be treated as government borrowing and not revenue. Similarly, pension benefits paid by these schemes should be treated as debt repayments rather than expense. Outstanding pension obligations should be recognized as debt. Also, fiscal data compiled under the 1986 GFS methodology, unlike the GFSM 2001 methodology, particularly distorts the fiscal picture in periods of pension reform.

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