Friday, July 6, 2012

HDC Pension scam?

I was looking through the HDC Draft Accounts for 2011/12 and I found this statement:

3 Valuation of Pension Fund
The contribution rate is determined by the Fund’s actuary based on triennial valuations. To avoid the impact of potential reductions in the workforce the actuary proposed that a fixed percentage of 17.8% should be used to provide for future service liabilities together with a lump sum contribution to reduce the existing deficit relating to past service. The lump sums proposed were £451k for 2011/12, £456k for 2012/13, £470k for 2013/14. The Council has chosen to make additional lump sum payments pending the results of any changes to the pension scheme that are determined by the Government. The additional payments are £209k (2011/12), £450k (2012/13) £669k (2013/14).

Whilst the Pensions contributions at SNTC are set to rise to 29% HDC looks good with a 17.8% contribution. Instead of increasing the basic amount HDC has gone down the road of making additional lump sums. I could understand the rationale behind making a one off contribution but these are lump sums paid over 3 years and should therefore increase the 17.8% contribution rate.

2011/12 £451k + £209k = £660k
2012/13 £456k + £450k = £906k
2013/14 £470k + £669k = £1.139 million

This equals £2.705 million over 3 years.

So our Council Tax increase and cuts in services aren't happening because of cuts in funding from Government. No the Council taxpayer has to find an extra £2.7 million over 3 years to pay for these pensions. Of course this is bureaucratic utopia where all the Council tax will not go on services but keeping the pension fund afloat!

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