Council taxpayers plugging Colchester Council £95million pension fund gap (From Essex County Standard)
Get involved: send your pictures, video, news and views by texting ECS to 80360, or email »
Council taxpayers plugging Colchester Council £95million pension fund gap
7:00pm Tuesday 20th August 2013 in News
COUNCIL taxpayers are having to plug a £95million gap in Colchester Council employees’ pension fund.
The shortfall, which was caused by failed investments, is being made up using £500,000 a year of residents’ money.
In April 2014, the current final salary scheme, which means employees are paid a pension according to their wage during their final three years at work, will be abolished and replaced with a scheme based on employees’ average salary over the course of their service.
In line with Department for Communities and Local Government rules, the council must continue offering new employees the expensive final salary arrangements despite the funding gap.
Will Quince, Conservative Group leader, labelled the situation “utterly bonkers”.
He added: “It is completely bonkers the council cannot set up its own arrangements.
“We are already dealing with a shortfall of £95million and eight months down the line, that is just going to be made worse.
“Councils should be able to make their own arrangements according to what they think is best and I hope this council has exhausted all ways it could do this.”
But Paul Smith, borough councillor responsible for business, said although Colchester Council supported the move to the average salary scheme because it is fairer to the majority of local authority employees, no changes to the scheme will be made until April.
He added the £95million is based on a worst case scenario.
“If the council shut up shop tomorrow, that is the shortfall.
“The likelihood is, though, we’re looking at that shortfall spanning 40 years.”
Colchester Council is advertising for two permanent positions, food waste team leader and older persons services team leader.
Comments are closed on this article.