The rocketing cost of council pensions in Waltham Forest
In July last year, we revealed the substantial rise in council staff drawing pensions compared to those paying in. We also revealed in April last year the enormous black hole in the Local Government Pension Scheme (LGPS) - a gaping pensions deficit of £54 billion for which taxpayers are ultimately liable.
These figures were brought into sharp focus in Waltham Forest earlier this month at a full council meeting. In a report authored by John Turnbull, Director of Finance and Procurement, the following was brought to the attention of councillors:
The Actuary to the Pension Fund (Mercer) undertook the three year valuation of the Fund as at the 31 March 2010 in accordance with theLocal Government Pension Scheme regulations and determined that the Employer Contributions to the Pension Fund required from the Council are within the 2% annual increase assumed within the Medium Term Financial Strategy (MTFS). The actual increase for 2011/12 was 1.9% to 23.4%. The increase for 2012/13 is a further 1.8% to 25.2% and that for 2013/14 an additional 2% to 27.2%. Therefore the results of the 2010 Actuarial Valuation of the Pension Fund have not resulted in any additional burden on the Council’s finances in excess of that assumed in the MTFS.
The next three year valuation of the Fund is planned to take place in2013/14 and it is anticipated that the employer’s contribution rate will increase at a slower rate. For 2014/15 it is assumed an increase of 1.5% to 28.70%, with a further 1.5% increase in 2015/16.
Putting that into plain English, the employer's pension contributions (paid for by taxpayers) has increased from 21.5 per cent in 2010/11 to 25.2 per cent in the current financial year. At the start of the next financial year on 1 April, taxpayers will have to fund another rise of 2 per cent, and it is anticipated that in 2015/16, taxpayers will have to make contributions of 30.2 per cent towards staff pensions. It wouldn't surprise me if that figure increased again in the years to come.
We have stated in many reports that the LGPS, like all public sector pensions, is not sustainable in the long term. The public sector trade unions have hit back at us, disputing our figures, and have done their best to rubbish our reports despite the fact that they are sourced direct from council accounts, but here it is in black and white. At a time when Waltham Forest Council is having to rein in spending, the cost of providing generous staff pensions is rocketing.
If your cost of your council's pension bill is going up, please let me know. Taxpayers cannot afford to continue picking up these increasingly larger bills.
6:00 AM 26, Nov 2016 Harry Fairhead
4:56 PM 24, Nov 2016 James Price
2:13 PM 23, Nov 2016 The TaxPayers' Alliance
10:57 AM 23, Nov 2016 Alex Wild
9:45 AM 23, Nov 2016 The TaxPayers' Alliance
6:00 AM 19, Nov 2016 Harry Fairhead