Pension payments are projected to increase manifold in the next 50 years due to rise in actual earnings and increased longevity, the National Audit Office (NAO) has warned in a report.
The NAO report on unfunded public sector schemes says the pension paid to public sector workers will rise to £79bn by 2060 from £25bn this year.
PPF chief executive Alan Rubenstein is under pressure to show the fund can match payments when costs reach their peak in 2030.
The first of two NAO reports looks at the costs incurred in so-called "pay as you go" public sector pension schemes, which cover 6.5 million people. Pensioners are paid out of taxation in the schemes, rather than from the proceeds of an underlying investment fund.
The four largest such schemes comprise the civil service, armed forces as well as the NHS and teachers schemes for England and Wales. They account for 75 per cent of total payments made from unfunded public sector schemes.
The NAO report found that total payments made by the schemes to pensioners were up by 38 per cent, from £14bn in 1999-2000 to £19.3bn in 2008-09. The primary reason for the increase was the 23 per cent rise in the number of pensioners during this period, as more people went for retirement.
The National Association of Pension Funds, representing schemes worth more than £800bn, has called for drastic reform in pension accounting rules.
The NAO will publish a second report later in the year, reviewing the impact of changes to the pension schemes and will put forward its recommendations.
Meanwhile, workers of seven more failed pension plans joined the PPF, bringing the number of schemes protected by the government to 120.
Civil servants are planning to let Britain's pension funds bankroll infrastructure projects, especially building motorways and power stations, through a special state-controlled bank.
