Auditor General Larry Dennis has criticised the Accountant General's Office for not giving accurate information, and said he is unable to give the Government pension fund a clean bill of health because he cannot be sure how much money it will have to pay out.

Two firms of actuaries - which looked at the fund - disagreed by a massive $74 million as to how much benefits will have to be given to Government workers when they retire.

Mr. Dennis said in his audit report on the Public Service Superannuation Fund for 1999 that he was unable to say whether the pension liability of $493.9 million, as stated by one firm of actuaries, was accurate.

And he criticised the Accountant General's Office for not providing the actuaries with complete and accurate information.

Accountant General Anthony Richardson hit back last night, saying it was "entirely misleading" to suggest there were problems with the data his office provided to the actuaries.

Mr. Dennis' report, written in August 2000, shows that two sets of actuaries scrutinised the fund, and the second thought an extra $74,180,700 would have to be paid out.

Mr. Dennis told The Royal Gazette this was because poor figures provided by the Accountant General's office led the first set of actuaries to make assumptions about how many dependents of employees would rely on pension benefits.

The report shows that the fund is $243,828,000 short of assets to pay the future benefits.

In his report, Mr. Dennis is unable to give the pension fund a clean bill of health. He writes: "I have been unable to obtain adequate assurance on the completeness and accuracy of the actuarial evaluation and subsequent shadow evaluation on which the pension liability of $493.9 million has been based.

"Accordingly, I was unable to determine whether any adjustments might be necessary to the obligations for pension benefits as disclosed in note 5 to the financial statements."

Mr. Dennis told The Royal Gazette: "The first actuary may have been basing it on UK standards and we found many inconsistencies with our own rules and guidelines. We expected them all to be under our guidelines.

"I suspect the figures given to the actuary from the Accountant General's Office were not good figures. The biggest concern was that information was able to be misinterpreted by an actuary.

"We've complained all the time that the information wasn't as good as it should be. The actuary has to be told, amongst other things, how many dependents are out there. The information was not complete and the actuary made too many assumptions.

"The new actuary made no assumptions, he asked for information. The Accountant General should be able to say that these problems have been rectified. I'm pleased with the results, but unfortunately $74 million is a lot of money to catch up with."

Mr. Dennis said the pension fund may run out of money in the next 15 to 20 years and may have to be bailed out by the Consolidated Fund, which consists of surplus Government money.

If this happens, Government may be forced to increase individual premiums, cut back on future benefits for people who join later, or pump in more Government cash.

Mr. Dennis said everyone who has paid into the fund so far will be guaranteed their full benefits.

He said: "The PSSF is not expected to run out in the next five years, but in the longer run, if nothing drastic happens, it will run out. We would have to increase the premiums to people, and we might want to change future benefits for people (who join in the future). The Consolidated Fund might decide to put in more funds or increased premiums.

"The Consolidated Fund doesn't have to pick up anything until say the next 15 or 20 years, so I don't think they'll make much change in the near future. They are making gradual efforts to see what they can do."

How did it happen: "It's very easy to increase people's benefits when a lot of people are putting in, but as the population gets older, the number getting into the fund is getting static and it begins to get out of whack."

Mr. Richardson said last night: "I have been unable to confirm that Mr. Dennis made the comments you attributed to him. Notwithstanding, the comments were inaccurate.

"The difference was purely as a result of differing opinions by two professional actuaries. Subsequent discussion by the actuaries was unable to determine whether there was an error in the actual calculations or an experience loss.

"Accordingly, I made the decision to treat the difference as an experience loss and amortise it over the estimated remaining service life of the participants, pending a complete actuarial review scheduled for March 31, 2001. The treatment accords with the Canadian accounting guidelines.

"For the year ended March 31, 2001, as recorded in the Financial Statements of the Consolidated Fund which has been tabled in the House of Assembly, Mr. Dennis has issued a clean audit opinion which certifies that he was satisfied with the actuarial study.

"The current actuarial information was based on the same data sets as previous studies. Therefore, it is entirely misleading to state that there were problems with the original data sets that were used in the study in 1999.

"Finally, to state that an actuary completed an actuarial review of a pension plan without making certain assumptions is without foundation because the actuarial study summarises the significant assumptions made. when completing the study."