Pension scheme a ‘ticking time bomb’

SCARBOROUGH Council could face a “ticking time bomb” pension scheme nightmare, according to shock new figures.

Pressure group The Taxpayers’ Alliance has revealed Scarborough Council had a deficit of £62,658,000 between 2010 and 2011.

The figures show the authority had assets worth £80,674,000, with liabilities totalling £143,332,000.

That means Scarborough has a deficit share of £577 per head of its 108,590 population.

North Yorkshire County Council manages the pension funds of all district councils with its borders, including Scarborough.

The worst offending council in Yorkshire is Leeds, with a pension deficit of £649,854,000.

Matthew Sinclair, director of The Taxpayers’ Alliance, said: “The deficit in the Local Government Pension Scheme remains a ticking time bomb that’s being left for future generations of taxpayers to deal with.

“With an ageing population and a crisis in the public finances, generous final salary schemes are inflexible and too expensive, and need urgent reform.”

The nationwide picture across the country shows a £54 billion gap exists in the pension sector.

However, that is a significant drop from the £91 billion from a year ago, reflecting how reliant pension assets are on the performance of stocks and shares.

Nevertheless, Mr Sinclair said a large scale reform was now necessary to alleviate the situation.

He added: “Councils should not take false comfort in the improvement of the stock market.

“Their pension liabilities continue to far outweigh their assets and the situation remains worse than two years ago.”

John Moore, North Yorkshire County Council’s corporate director of finance, said: “Any deficit is obviously a problem but with pensions we are able to take a very long view.

“A deficit can fluctuate wildly depending on what happens on the financial markets.

“These asset figures can go up and down from day to day with great volatility - the amount can go up and down as much as three per cent overnight.

“What this is, is just a snapshot it time.”

Mr Moore also rejected “gold plated pensions” within the public sector, saying most beneficiaries have worked on relatively low pay.

He added: “It is about cleaners; social workers; benefit clerks. Final salary schemes are not hugely expensive for these sort of positions.”