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Labour Council wants to make £180M pension fund deficit even bigger

Luton Council’s staff pension fund is running at a deficit and the shortfall has grown from £122m in 2008 to £180M at 31st March 2011. At a meeting on Tuesday 1st November 2011 Luton Council’s ruling Labour councillors voted through a resolution saying Council employees should not be asked to make a bigger contribution to their pension scheme in order to stop the deficit from getting bigger each year.

“Luton Council’s net spend on services in the year to 31st march was £265M,” says Liberal Democrat leader on the Council, David Franks. “That puts the £180M pension fund gap in perspective.”

“The current gap between what the pension fund needs to honour its commitments and the funding it holds is £180M, and that’s just the deficit. In spite of the Council putting £25M a year into two pension schemes the gap on the main staff fund is just getting bigger.”

“They don’t even have a plan to reduce the problem. Yes there is a pension fund reserve and it has the grand total of £2.8M saved up. That will not go very far.”

“The problem is so big that if they decided to pay off the deficit through a ten year plan it would need a 30% Council Tax increase which would cost the average Band D Taxpayer in Luton an extra £457 a year. Yet Labour Councillors are complaining because the government says staff should be asked to pay a little more to hold on to what most people say is a very generous pension scheme.”

“Anyone who thinks this situation is sustainable is living on a different planet to the rest of us.”

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