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Taxpayers set to top up council pensions

9:00am Sunday 27th June 2010 in News By Lauren Oldershaw

COLCHESTER Council is set to use £250,000 of taxpayers’ money to increase its pensions contribution as it battles against a £51million blackhole.

As staff contributions do not cover the cost, the rise is roughly the equivalent of an annual 2.5 per cent council tax hike for residents.

Taxpayers and staff could be forced to pay more into the pension pot.

Paul Smith, councillor responsible for resources and diversity, said: “We are having to look at the pensions fund every year, and how the blackhole looks depends every year on different things.

“For instance, if it has been a good year, and we have had people retire and not so many new staff arriving, then it will not affect it too badly.

“It also depends on how our investments have done. Last year, the deficit was £51.939million and I think that was quite good because we had a good year with investments.

“I am not sure about this year. If we had invested in BP, for example, instead of Shell, then obviously it would not be so good.”

The authority’s finance and audit scrutiny panel will reveal how much bigger the deficit has got, and its response on Tuesday.

Tendring Council’s pensions blackhole has grown by £11.8million in the last year from £35.8million to £47.7million.

The authority hopes to increase contributions by £500,000 each year to reduce its long-term deficit.

The shortfall this year for Braintree Council increased by £14.736million and now stands at £61.311million.

Maldon District Council’s pension fund deficit has increased by more than £5million

Comments(9)

AndyP335 says...
10:19am Sun 27 Jun 10

The reason there's a pensions 'black hole' is simple: public-sector pensions 'rights' are unsustainable. What is more they are unfair to the community who have to fund them. Many in the private sector have been made redundant or taken pay cuts with little or no pension provision while council employees take early retirements with pensions uplifts from the 'capital account'. If the general public were mobilised on this point there would be revolution. Cllr Smith was in the forefront when the last Clerk and Deputy Clerk walked off with VAST pension pots at the taxpayers' expense: I hope he stands up for fairness and justice again and more successfully this time. Council tax payers have had enough of paying for other people's pensions while having no-one to bail us out.

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horizontal says...
11:37am Sun 27 Jun 10

It’s outrageous that ordinary pensioners trying to scrape by on the meagre state allowance are being forced to subsidise public sector unrealistic early retirement final salary pensions. If council pen-pushers want extravagant pensions they should pay for them – not us.

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totallyfootball says...
12:01pm Sun 27 Jun 10

horizontal wrote:
It’s outrageous that ordinary pensioners trying to scrape by on the meagre state allowance are being forced to subsidise public sector unrealistic early retirement final salary pensions. If council pen-pushers want extravagant pensions they should pay for them – not us.
Exactly, they should be made to get their own. The deficit is hideous and unforgivable. Someone seriously took their eye off the ball!

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Heinz says...
4:41pm Sun 27 Jun 10

The main problem with 'public sector' pensions is that employees' contributions were not invested/saved over the years to fund their future pensions - the money was spent.
.
Now the chickens are coming home to roost.

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german 20 20 team says...
6:56pm Sun 27 Jun 10

Staff should be made to up the contributions, simple, why should the rest of us pay for them!!!!!!!!!

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crosby says...
11:22pm Sun 27 Jun 10

We have to pay for their pensions because we as tax payers are their employers just the same as your employer presumably contributes to your pension if you have one. And most of them are extremely modest and very little to live on.

However, you are right. The private company penion is now usually the much more modest average salary rather than final salary and public pensions must follow suit as must the retirement age. And earnings (and with it pensions) must be capped at a sensible level.

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Boris says...
11:36pm Sun 27 Jun 10

A pension is part of each employee's remuneration, and it must be honoured as per contract. Any change, for example making them pay higher contributions, must be negotiated and agreed with their unions.
Years ago, many of us chose to work in the private sector because the pay was better. We allowed our employers to get away with cutting our pensions. Public sector workers didn't, and if they have any sense they will stand rock solid against any attempt to do to them what our employers did to us.

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Sdapeze says...
8:30am Mon 28 Jun 10

The system is wrong. Whoever agreed to these gold plated pensions got it wrong and now we are expected to pay for them. It has got to stop. I want my council tax to go on services not fat cat pensions. End this now. Bite the bullet and take the inevitable consequences of a mass strike. Sack the lot and offer new contracts for those who toe the line. We all have responsibility to provide for our future. Why should elitism be rewarded, yet the poor be made to pay for it?

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Boris says...
11:28pm Mon 28 Jun 10

What gold-plated pensions? What fat cats? Sdapeze, you may be thinking of a few senior council officers, the ones who earn more than the prime minister. Most council employees earn considerably less than you, and they need their pensions, so please spare us your fascist-style proposals.

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