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Council services threatened by pensions deficit
Katharine Barney, Evening Standard28.01.09
PUBLIC services could be under threat because of a black hole in London's council pension fund, it emerged today.
An ageing population has led to a £210million deficit in the London Pensions Fund Authority. Now the Government has asked borough leaders for more cash despite the low levels of funding recently announced.
Council bosses say if they have to pay up, services such as waste collection and libraries may be hit. Instead they asked for more time and said City Hall should shoulder some of the cost.
The LPFA is one of the largest local government pension schemes with members from the former Greater London Council and the Inner London Education Authority.
Justine Greening, shadow minister for local government, said overspending at the GLC under Ken Livingstone was to blame. A City Hall spokesman said the Mayor wants the Government to wait until next year to allow for consultation.
Reader views (13)
There'll never be a black hole in Council (or Civil Servant) Pensions.
They'll simply take more money from their customers (otherwise known as Cash Cows), to pay for their Pensions.
It wouldn't be so bad if their 'customers' could say what Services they wanted their local monopoly to provide!
If only they stuck to sweeping the roads and emptying bins we'd all be so much better off.
- Cap, London
If I was a UK public govt employee I would be very worried about pensions and benefits. As the UK population realises that it must pay much higher taxes with a lower standard of living due to the economic downturn and increased govt debt they will most certainly be in the streets protesting to reform the very generous UK govt employee wages, work conditions, bonuses, retirement age, pensions,etc. I would not bet that the current "contracts" will survive the next three years nor will the Labour govt.
- Kr, Florence Italy
Suppose we have to keep them with enough money to afford their cardigans and beard trimmers
- Dc, London
Very easy to fix this supposed problem - if there is a deficit in the pension fund then either the pensioners or potential pensioners increase their contributions to ocver it. Alternatively payouts or rules are changed so the existing fund covers it.
On NO ACCOUNT extort more from any taxpayer !
- Roger, England
Perhaps you will be kind enough to again let me use your website to ask the sanctimonious self-righteous hypocrite known as "P Staker" what he does for a living and what is his salary package - and as an added bonus, what his most recent peformance appraisal said about him.
Maybe this time he'll have the balls to tell all.
- Austen, London
Local Government pensions are funded through investments made with contributions from both employees and employers. During the "boom" years most local authorities chose to have "contribution holidays" while employees continued to pay 6% of their income into their pension fund. It is the failure of local authorities to contribute sufficiently in past years that has led to this so called crisis. The vast majority of council workers work hard to improve and maintain the communities they serve. Many having foregone the considerably higher private sector salaries that they could have commanded having chosen to serve the public rather than shareholders profits.
- Nick, London
holes in my road or gold plated pensions...let me think about it for a second.
- Fly, london
It is about time this retiring early from the council with a generous lump sum and enhanced index linked pension was stopped. I know of one who came back on a consultancy basis and other who is happy to work part time at minimum wage to get even more spare cash. Their actions are depriving others of work. Early retirement should not be an option unless there are searious healt resons!
- Michael, London
When councils make people redundant and then immediately remploy them as consultants at twice the money what do you expect.
- David Bryant, England, Newmarket
So we dont really pay council tax, it's a council workers pension fund subsidy isn't it.
It wouldn't be quite so bad if anyone at the council was actually half decent at their job.
I have never in my life met one single person employed by a council, who is any good at their job, or took any pride in what they do.
- P Staker, London
Its time for these cosseted workers to join the real world. As from tomorrow your pension is now on par with the private sector and you have to work till you drop. Easy really! See how many of these wasters vote Labour then ?
- Duncan Walker, Lucky to live in Thailand
Public sector pensions have to be brought into the real world - we can not afford people to retire at 60, with a gold plated pension.
- Jeremy E, London
There is absolutely no justification in cutting essential services whilst public employees retain a retirement age of 60 - which has been all but scrapped in the private sector. It should be aligned with state pension age (65) immediately. Furthermore, I understand that enhancing benefits for those retiring early is common in some public bodies. This should STOP forthwith. The actuarial cost of any enhancements should be published - the public will be aghast at the cost of such enhancements.
- Ab, London
