Government is to seek actuarial advice on the state of the pension fund for Government employees which has a large unfunded liability.

Finance Minister Paula Cox also revealed on Friday that the Public Service Superannuation Fund's (PSSF) assets slumped by 15 percent or $43 million in the 2003 financial year.

But the fund rebounded by $69 million or 28 percent this year.

Ms Cox said the greatest challenge for the fund was how to pay out benefits which were previously paid out of the Consolidated Fund under other pension acts. That has led Government to request actuarial help to find a solution.

Ms Cox tabled the PSSF's financial statements for March 31, 2003 in the House of Assembly on Friday.

“The statement on net assets available for benefits shows a decline of some $43 million between 2002 and 2003,” she explained. “The assets were valued at $281 million in 2002 and the valuation in 2003 was $238 million.”

However, she added: “There is ebb and flow in the world's capital markets and therefore valuations of investment portfolios rise and fall accordingly.

“The net asset statement for 2003 represents a snapshot of the portfolio valuation on that particular day. Since that time, the global stock markets have been performing exceedingly well and all of the apparent losses have been recouped.

“On that note, I am pleased to advise that as of September 30, 2004 the value of the Superannuation Fund stood at approximately $307 million, some $69 million more than ... reported in the March 31, 2003 statements.”

The problem now is how to address the unfunded liability, she said.

“The nub of the problem is that the PSSF is charged with not only paying out benefits accruing from the PSSF Act 1981, but also must pay out all benefits falling under any of the repealed pension-related Acts - which include the Pension Act 1970, the School Teachers' Superannuation Act 1934, and the Hospital Nurses Superannuation Act 1948.

“Before the PSSF Act came into operation, the pensions relating to these Acts were paid out of the Consolidated Fund.

“Clearly this fact has a detrimental effect on the cash flow of the PSSF and has a significant effect on the unfunded liability which has been in existence since the inception of the Fund.”

There is no single and simple fix to the problem, the Minister said.

However, she said: “I wish to assure current and future pensioners that the Government is sensitive to the challenges facing pension plans of this nature, and has sought actuarial advice in order to ensure that the Fund remains viable in the long-term.”