County council pension costs soar
Pension funds at Endeavour House are more than �600million in the red - nearly four times the deficit of two years ago.
SUFFOLK: Pension funds at Endeavour House are more than �600million in the red - nearly four times the deficit of two years ago.
Unless there is a dramatic improvement in the economy, council taxpayers could be asked next year to increase their contribution rate from 19per cent of employee' salaries to 31.4pc
Despite a slight improvement in its investments in the third quarter of the year, a report from corporate finance manager Peter Edwards says the value of the main final salary pension fund has been hit by the poor performance of stock markets throughout the world as a result of the economic downturn. It now stands at �1.72billion.
At the same time, liabilities have risen by 30pc, reflecting the increase in benefits due to employees on retirement as a result of increased years of service.
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The pension fund includes county and district council staff, police civilian staff, non-teaching staff at further education colleges, and probation staff.
In a report to be considered by the county council later this month, the actuary, Hymans Robertson LLP, has estimated that the funding level stands at 68.3pc of the total liability - that is the amount of cash which would have to be paid out if all employees retired now.
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This is a 6.8pc increase since June 2008, but compares with 89pc at the last statutory valuation of the fund at March 2007. In monetary terms, the deficit has grown from �158m in 2007 to �616m at the end of September.
The county council is also responsible for the smaller No.2 pension fund, which relates to the employees and pensioners of Ipswich Buses. Its valuation on September 30 was �14.8 million, compared with �13.1 million at June 2009.
The next major valuation as required by law is March 2010, when councils will have to decide the amount of money council taxpayers will have to contribute to cover their obligations to employees.