Friday, 13 April 2012

Local Government Pension Scheme Funding

Members may be concerned about an article in today's Scotsman that claims "THE pensions of more than 230,000 council workers in Scotland could be at risk after a black hole of more than £4 billion was uncovered in a report published today."

However, unlike the Scotsman, most members will recognise that the "report" is produced by an organisation called 'Taxpayer Scotland' and therefore less than credible. This is an offshoot from the far-right business funded body the 'Tax Payers Alliance' that has a long standing agenda of undermining quality public service pension provision. They are not a pensions body and have no expertise in this field.

As anyone who understands pensions could have told the Scotsman, it is frankly absurd to take a snapshot look at pension funds and claim that  "the country’s 32 local authorities do not have enough funds to pay their employees’ pensions."  

The LGPS (Scotland) is the largest pension scheme in Scotland and not surprisingly each of the administering funds have professional valuations that ensure the scheme can meet its obligations. In addition under an agreement reached in 2008 there is a cost sharing provision that ensures that the cost of doing so is fairly shared. We are awaiting the final details of the 2011 valuations, but all the indications are that the schemes are in good health. So much so that the largest scheme (covering half of Scotland) has cancelled planned increases in contributions over the next two years.

Doesn't sound much like a 'gaping pensions deficit' does it? That's because it doesn't exist. The administrators of an equivalent private sector scheme would love to have the funding levels of our efficient LGPS in Scotland.

The Tax Payers Alliance (better known to us as the 'Tax Dodgers Alliance') have a long track record of producing this type of daft scare story. Reputable newspapers should know better than to reproduce their nonsense and cause unnecessary concern amongst large numbers of Scots who rely on this pension scheme.

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