County pension fund falls by £100m

A STAGGERING £100million has been wiped off the value of Suffolk's pension pot in just six months as markets nose-dive, The Evening Star can reveal today.

A STAGGERING £100million has been wiped off the value of Suffolk's pension pot in just six months as markets nose-dive, The Evening Star can reveal today.

The massive loss has been triggered by turmoil in the global markets with billions being wiped off share prices as concerns continue over the stability of banks and the prospect of recession.

Yesterday London's FTSE 100 share index dropped below 4,000 points for the first time in years, a drop of more than 40 per cent since late last year.

A large quantity of the council's pension fund, which stood at £1.38 billion at the end of December last year, is invested in stocks and shares.

As a result of falling share values, by June this year the pension pot had dwindled to £1.28 billion, a fall of £100 million.

It is believed the pot will have plummeted by millions more as a result of the last three months of share price falls although it is unclear by how much.

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The Suffolk County Council pension fund provides money for former county staff as well as former employees at Suffolk's seven district councils.

Private pension funds will also have suffered as a result of the economic situation.

County chiefs have moved to allay potential fears regarding the situation claiming the loss will not impact on pension payments.

“The pension fund is a long-term investment,” Geoff Dobson, head of finance at the council, said.

“It can fall but it can bounce back quickly too.

“We take a long-term view and have a long-term funding strategy that is still a robust investment.”

Jeremy Pembroke, leader of the council, said: “Every pension fund takes at least a 30 year view and during that time you will get fluctuations from time to time.

“It is not the time to sell equities. Where people have switched and changed in volatile markets, pension funds have underperformed.

“What every pension fund has to do now is be sensible, prudent and cautious.”

The news of big losses for the county's pension pot comes after The Evening Star revealed that Ipswich Borough Council has around £5million invested with troubled Icelandic banks.

In total the cash makes up more than 12 per cent of the council's estimated £40m investment portfolio.

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The largest pension fund stock market investments are in Royal Dutch Shell (2pc of the fund), Vodafone (2pc) and BP (2pc).

Royal Dutch Shell has seen shares slide by 32 per cent since September last year

Dec 2007 £1,382.497

March 2008 £1,296.804

June 2008 £1,282.822

SUFFOLK savings are being monitored on a regular basis in a bid to avoid multi-million pound investments falling into jeopardy, it emerged today.

County council leader Jeremy Pembroke said he and chief executive Andrea Hill are taking a hands-on approach in the current economic turmoil, meeting with finance chiefs to keep a handle on the situation.

The council has around £67million in savings spread out in different savings accounts.

Mr Pembroke said: “The chief executive and I have, for some time now, been monitoring where our money is.

“We have a hands-on approach over this one.

“Nothing at this time is certain but what we have done to the very best of our ability is to make sure we are saving in the best possible houses.

“I have to say our finance chiefs have been very careful and very diligent and we are doing the best we can to make sure we don't get an Icelandic situation.”