April 17 2014 Latest news:
Tuesday, April 17, 2012
COUNCIL pension schemes in Cambs and Herts have run up a deficit of more than £800m sparking fears taxpayers may have to foot the bill.
The TaxPayers’ Alliance uncovered the figures and claims final salary schemes are too generous at a time of economic uncertainty and could cause problems when coupled with an ageing population, triggering a call for reform.
Matthew Sinclair, Director of the TaxPayers’ Alliance, said: “The deficit in the Local Government Pension Scheme remains a ticking time bomb that’s being left for future generations of taxpayers to deal with.
“With an ageing population and a crisis in the public finances, generous final salary schemes like the LGPS [Local Government Pension Scheme] are inflexible and too expensive, and need urgent reform. Councils should not take false comfort in the improvement in the stock market.
“Their pension liabilities continue to far outweigh their assets and the situation remains worse than two years ago.”
Hertfordshire County Council had the biggest deficit of all of Crow Country’s councils at £427m as the authority has assets of £1,106,675,000 and liabilities of £1,534,605,000.
Public pensions are managed at a county level with contributions made by various bodies but the Taxpayers’ Alliance has released figures down to district level with North Herts District Council running a deficit of £32m.
Cambridgeshire County Council and South Cambridgeshire District Council’s pension scheme is also running a deficit with the TaxPayers’ Alliance putting Shire Hall’s at £308m and the district’s at £31m.
CCC claim to have the task in hand and is working on a number of schemes to bring it under control.
A spokesman for the body said: “These figures are just a snapshot of the current situation and reflect the current down trend in markets reducing the value of investments. Our plans to deal with the deficit reach over decades in the future which is when the effects, if unchecked, would be felt.
“It is not unusual for pension funds like this to carry this type of deficit and according to the TPA’s figures Cambridgeshire is better than many similar schemes.”
Royston’s Conservative MP expressed concern at the problem and backed government plans to reforms the system.
Oliver Heald said: “The reason the government is making changes to the public sector pensions and talking with unions is because we are living that much longer and that is what is adding to the deficit, that and the general world recession which has certainly damaged stock markets.
“I’m confident if we can make the changes in public sector pensions and stimulate the world economy that we will be able to manage the deficit.
“Its period where difficult decisions are having to be made, because there is a mountain of debt nationally, personally and in pension schemes that has to be managed.”