The radical pensions plan that's a non-starter

Together, these add up to about £420 billion, and Nangle wants the Government to turn the promises into tradable Government stock. He's director of fixed income at Baring Asset Management, a business that lives on what it trades, so his motivation is clear.

He'd have twice as much stock to play with, and his colleagues from the equity desk would be straight round to the freshly appointed pension fund managers, urging them to diversify their vast new portfolio before prices collapsed.

In short, Nangle's wangle is a no-no. That's not to say it's silly.

The casual way state employees have been handed out valuable pension promises, with neither giver nor recipient having any real clue what they are worth, is storing up deep trouble.

Turning the promises into tradable debt would show just how expensive they really are, and Gordon

Brown would no longer be able to boast about our low national debt.

He's already committed his successor to producing a "whole of Government accounts" balance sheet next year, but that promises to be about as much use as Vodafone's profit-and-loss statement.

Nangle's securitisation would also highlight the shambles the actuaries have brought on us by their weird idea of how to account for pension liabilities.

If you had some assets which you hoped would pay for your retirement, you'd feel poorer if the price went down. The continuing slide in the bond market is wiping billions off the value of pension funds' assets, but the actuaries think this is good news for the funds, rather than bad.

They are cutting their estimates of the deficits on the grounds that the next pound going into Government debt will buy more income than those invested already.

The logical conclusion of this mathematical madness is that if bond prices halved, pension funds would find themselves with surpluses so big that companies would never need to contribute another penny.

This nonsense is probably enough on its own to discourage any chancellor from adopting the Nangle, but there is a still more powerful reason not to. Few publicsector workers have more than the haziest idea of their pension entitlements, so there's plenty of scope for cheese-paring them over the years.

As any politician will tell you, devaluing promises by stealth is much easier than breaking them.

The contributors to what used to be called Serps have discovered this over the years, and their pockets are still being picked.

The traditional route to devaluation is inflation, which destroys the value of those bonds the actuaries love so much. Unfortunately for future chancellors, many of the public-sector pension liabilities are index-linked, but if the workers think they are protected, they should look out.

Brown has successfully displaced the Retail Prices Index (currently rising at 4.2%) with the Consumer Price Index (currently rising at 2.5%) in the way inflation is reported, and he's introducing the idea of "core" inflation, which seems designed to exclude the cost of anything that's going up.

Meanwhile, if you are fortunate enough to be one of those teachers, nurses, servicemen or policemen to whom the £420 billion has been promised, your best course of action would be to take the money out and invest it somewhere more suited to a pension fund, like shares. You will not be surprised to learn that the Government will not let you do this..