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Pension scheme deficits are ‘a ticking timebomb’

By UttoxeterPostandTimes.3522974.UttoxeterPostandTimes  |  Posted: April 18, 2012

By Tim Fletcher

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THE county council which covers Uttoxeter has some of the biggest pension deficits in the country, figures released by a low-tax pressure group reveal.

The Taxpayers’ Alliance report shows Staffordshire County Council has a deficit in its local government pension scheme (LGPS) of more than half a billion pounds, the ninth largest of 433 authorities in the UK.

Meanwhile, nearby Derbyshire County Council’s pensions deficit — the gap between the scheme’s assets and what it owes in pension payments — is more than £440,000,000, the 20th highest figure.

The alliance claims local government pensions are ‘inflexible’ and ‘too expensive’ and says a £54 billion combined deficit for authorities across the country is ‘a ticking time bomb’ for future generations.

The group is calling for ‘urgent reform’ including increasing employee contributions and freezing all local authority pension entitlements at their current levels.

However, the group has been accused of ‘attacking the pension rights’ of low paid workers such as dinner ladies and bin men by the public sector union Unison.

Heather Wakefield, the union’s head of local government, said the alliance’s claim that the figures represented a ‘£54 billion black hole’ were ‘pure fantasy’ and said the LGPS was ‘a sustainable and affordable way of helping low-paid workers save for their retirement’.

Staffordshire County Council’s deputy leader Ian Parry said: “The Staffordshire Pension Fund is one of the largest local government pension schemes in the country and includes the county council, district and borough councils, police and fire service.

“Therefore any deficit is likely to be a larger sum in comparison to other schemes.

“The pension fund is invested in a range of assets including shares, bonds and property.

“It naturally fluctuates in value as the underlying markets move in relation to world events. Payments into the fund currently exceed payments out, so it will not need to sell off any of its investments for a number of years.

“As a result, temporary changes in the value of the fund do not affect the long term ability to pay the cost of future pensions.” The figures show East Staffordshire Borough Council had a pensions deficit of £28 million.

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