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Thursday, 23 October 2014

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Council faces £14m pension fund deficit

COPELAND Council is looking at ways to tackle its pension fund deficit of up to £14million – starting off with paying off a lump sum of cash.

At a Special Executive meeting, councillors and officials looked at how much the council needs to pay and how and when it will do it.

They were told that Copeland’s figures are part of a wider county issue as the total pension fund deficit for the Cumbria Local Government Pension Scheme, which it is part of, is £440million.

A recent report revealed that Copeland Council has been given three possible estimates – £10million, £14million or £17million – on how much it owes. The money needs to be paid back over the next 19 years.

The council says the report states the most realistic deficit amount is £10million.

Copeland’s Executive heard that the council can pay an immediate lump sum of £600,000: £420,000 will be taken from the council’s general reserve fund and the remaining £180,00 will be taken from the risk based reserves.

Further payments could also be made over the following dates: £82,000 in 2014/15; £206,000 in 2015/16; and £340,000 in 2016/17 and following years.

There will also be changes to the contribution rate for future services.

The council’s monitoring officer, Tim Capper, said: “The council is required to fund the deficit in the pension fund. Council approval is required for use of reserves for a one-off payment.”

Coun Hugh Branney said the figures shows that the deficit is not just an issue for Copeland, but for the county as a whole.

The Executive agreed to recommend the proposals at Copeland’s next full council meeting for approval.

Altogether there are 109 employers in the scheme, including county and borough councils, as well as the fire service and police authorities. It is also open to other bodies such as outsourcing contractors and charitable bodies housing associations.

All council employees have an opportunity to join the scheme, run through Cumbria County Council.

Coun Gillian Troughton, portfolio holder for finance and HR, said: “The Cumbria Local Government Pension Scheme is managed and administered by Cumbria County Council on behalf of all of the members of the scheme.

“Its assets are managed centrally to secure the best returns for the scheme members. The current deficit is an issue for all member employers, and is not unique to Copeland.”

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