Auditor General Larry Dennis yesterday greeted the news that Government is seeking actuarial help with the Public Service Superannuation Fund with relief.

Twelve years after first raising the alarm about the fund running out, he said he was glad it was finally being done ? though he did wonder why Government finally chose to take action now.

The Auditor General has not given the Public Service Superannuation Fund (PSSF) a clean bill of health in years, even saying in 2001 that the fund could run out in the next 15 to 20 years.

PSSF Financial Statements for the year ending March 31, 2003, show the fund received some $23 million in assets that year ? but paid out more than $34 million. The extra $11 million came as a bail-out from the Consolidated Fund, which by law is required to meet any PSSF shortfalls.

?All Government-related pensions have been paid out of the PSSF from April 1, 1981,? assistant financial secretary Anthony Manders explained in an e-mail yesterday. ?The PSSF is currently paying out pensions that commenced prior to its establishment (in 1981) and for which it received no funding. This shortfall has been occurring since the inception of the PSSF.?

Roughly $11 million was also paid into the PSSF from the Consolidated Fund in the year ending March 2002, meaning the PSSF has faced a shortfall of $22 million over the past two years.

?This is a concern to the Government,? Mr. Manders wrote.

In 2001 it was noted that if such bailouts continue, Government could have to face increasing individual premiums, cutting back on future benefits for people who join later, or continue to pump in Government cash. In the long-term, concerns have also been raised over the unfunded liability of the PSSF ? i.e. the amount not currently covered by the PSSF that would have to be paid if everyone eligible for the pension retired tomorrow. In 1990, the unfunded liability was $117 million. It currently stands at around $320 million ? a sum which would have to be paid out of Government?s bank account, the Consolidated Fund.

Finance Minister Paula Cox addressed those concerns Monday, saying that Government has sought actuarial advice. Yesterday she added she did not want to pre-empt the actuarial findings.

?I can confirm that as per the Act, the triennial actuarial valuations for funding and accounting purposes are prepared by Government?s actuary,? Mr. Manders stated. ?A full Actuarial Valuation was completed as at March 31, 2004, but has not been finalised. Along with the standard report we have requested more information from the actuary relating to the fund in general.?

In a statement on Friday, Ms Cox said there was no simple fix to the problem. ?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.