Peter Webb: Surrey pension deficit is off the planet 3

Fiona McEvoy Grassroots

Surrey resident taxpayers who read the Surrey Advertiser this morning have been brought face to face with a shock increase in the County Council pension deficit to £1,099m which is “off the planet”.

All this information should be given formally with commentary by the council leadership in a conventional Annual Report. Such a report has been published for 2009-10 (and is on the web-site for the first time) but amazingly with no abridged audited financial accounts! Shouldn’t ‘ratepayers’ be told formally?

Surrey branch's correspondence with County Leader, Dr Povey, about this raised many points including – “What’s going on with Income & Expenditure deficits, £244m accumulating over 7 years to 31st March 2009 and rising? And capital revaluations?”. His only response was: “I will be considering these points with colleagues as we move forward and continue to improve our processes.”

The Treasury Manager at Surrey County Council revealed to the National Association of Pension Funds annual conference that the pension deficit had now topped £1billion saying “It’s a worrying position. The TaxPayers’ Alliance is going to go ballistic when our accounts are published. They will say we are bankrupt and we are not.” We did and they are technically insolvent.

The pension scheme is available to all local authority workers, including those in 11 district and borough councils, but separately from teachers and firemen. The deficit is the calculated future liability accruing to date, less the value of the invested fund which itself varies on the stock market. The burden is born by the taxpayer after the contributions by employees. These are exceeded by the employer’s contribution (£54m last year). On top of that the deficit is ‘back-funded’ over 20 years and this will rise annually to £55m (£36m last year) and to which the employees make no contribution. That is now over £100m down to the taxpayer every year and we’re losing the race to catch up…

While this deficit does not affect the council’s ability to meet its current liabilities, the size of the deficit more than wipes out the net assets on the balance sheet. This in effect means that all our public assets – such as schools and community centres – are mortgaged up to the hilt to the employees’ pension scheme. The deficit is obviously also subject to the generosity of promised benefits. Virtually all final salary schemes have been closed in the private sector as they’re deemed unaffordable.

This situation begins to suggest that the council, and councillors perhaps risking personal liability, ought to consider whether it is still a going concern. Every organisation when arriving at its balance sheet must consider this as a basic determinant of value. Obviously assets are only worth better than ‘fire-sale’ value given confidence in continuity. And government can go bankrupt. Argentina was a recent case of a country and the US State of California a local authority.

This all shows that it is urgently necessary for our Government and local authorities to raise their game in the managerial and financial discipline areas, and formal and timely accounting to resident taxpayers. Taxpayers have been fleeced while kept in the dark for long enough.

Peter Webb, Surrey TaxPayers Alliance

Fiona McEvoy

Follow @

Lee Blunden

Are the pensions generous? – can you please provide an example of the pension say a admin assistant working in a coucil would receive?
Trev1

I’ve paid into a public sector company pension all my life, the pension I get reflects what I have payed in. I think the problem is that youngsters don’t want to bother with a pension so nobody is now paying in to pay the pensioners. The money I have paid in over the years has all been spent and is gone. The money has been paid in and I should be entitled to a pension. The trouble is, pay has gone up so much and people are getting £50k/year pension when they have probably only payed £500k in. This entitles them to less than £20k/year pension but they are getting £50k plus with nobody paying towards it.
The pension system has been destroyed by plundering and legislation and now taxpayers are up in arms about it!
http://www.watchstore.cc watchstore

If you want a simple and regular monitoring of the promotion year, you can find good Watch at an affordable price, without details. But if you understand that your watch is much more than just a mechanism, which shows the time, you should consider buying more interesting model prison. And this is the right decision, because the clock is your business card, a sign of success and prosperity to you.