The island’s pension liability has risen by £1bn in a year, the gov’s annual audited accounts have revealed.

Known as the Dark Blue Book, the audited accounts show an overall surplus of £137.3m for the year end March 31 2021 compared to a deficit of £221.7m in 2019/20.

Who is Getting What?

One of the most eye catching figures in the accounts are the vast salaries paid to some gov officials. The Dark Blue Book lists the salaries paid to people over £50,000 and there are a lot of them, these include ‘Group’ salaries, which includes statutory boards and gov owned companies and central gov (depts etc). Looking back on previous years, the number of people paid more than £50,000 has again shot up, rising from 1,436 in 2019/20 to 1,551 this year (in 18/19 it was 1,207).

This has contributed to salaries and wages as a percentage of gross expenditure rising from 34% in 2019/20 to 42% in 2020/21. In the same period social security benefits rose from 19% of expenditure to 29%.

Also seeing an increase on last year, one individual has got themselves a nice pay rise, earning between £350,000 and £374,999, while two are on between £325,000 and £349,999. Last year there were three people in the £325,000 to £349,999 bracket and no one any higher.

By comparison the new MHKs will earn a base salary of £65,098 with ministers and chairs of boards being paid extra and the new Chief Minister will receive 30% more than the MHKs base rate on his, or her, salary, taking home £84,627, which is actually less than Howard Quayle is paid now.

Taking that comparison further, the bill for the salaries over £50,000 was at least £102,950,000, up from £94,775,000 in 2019/20. As of March 31 2021, the gov had paid out £66.5m in salary support due to the pandemic. 

Pension Liability

Taking a recent hot topic at random, such as free school meals and the summer holidays. Last year when the gov extended a scheme to provide vouchers during the summer holidays for the 2,040 children who qualify for free meals, it was said that it would cost £140,000. Based on those figures, the gov could provide each child who receives free school meals with vouchers throughout the summer holidays and still pay that gov employee currently receiving between £350,000 and £374,999 over £200,000.

The 2020/21 accounts are showing a net liability position of £566m, due to an increase in the pension liability. The Treasury say that this increase in liability is the result of actuarial assumptions which may change over time.

They added: ‘The main assumption that has driven this increase is the real discount rate which has decreased from 2019/20. These assumptions can cause volatility in the liability presented, and a similar position was seen in the 2018/19 accounts which then reduced in 2019/20.’

The accounts show that the pension liability has shot up by £1bn to £4.8bn compared to £3.8bn in 2019/20. This increase in liability is the result of actuarial assumptions (an estimate of an uncertain variable input into a financial model) which may change over time. However, while this figure is alarming, these are not pensions that are intended to be realised in the short term and may well change significantly before they have to be realised. 

Surplus

The gov’s accounts show that while last year saw a deficit of £137.3m, this year has seen a surplus of £221.7m. The Treasury says that this is due to ‘unrealised gains on investments of £233.8m which have occurred due to a recovery in the stock market’. An unrealised gain is a potential profit that exists on paper, resulting from an investment. The previous year which saw unrealised losses on investments of £123.5m.

A gov statement says: ‘Group accounts include transactions and balances in respect of the two non-revenue funded statutory boards (Manx Utilities Authority and Isle of Man Post Office) in addition to Government-owned companies, namely Radio Manx Limited, Laxey Glen Mills Limited, Isle of Man Film Limited, Isle of Man Film DOI Limited, Isle of Man Steam Packet Group Limited and the Isle of Man Meat Company Ltd.

‘These accounts showed an overall surplus of £140.7m compared to a deficit of £231.4m in 2019/20. The change to a surplus position is again primarily due to unrealised gains on investments of £223.5m and gains of £6m on forward contracts, which have occurred as a result of the recovery of the stock market. In 2019/20 Group unrealised losses on investments were £118m and losses on forward contracts were £13.4m.’

You can read the full accounts below:

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