North Yorkshire Pension Fund deficit grows (From York Press)

North Yorkshire Pension Fund deficit grows

8:44am Monday 5th September 2011 in News By Dan Bean, dan.bean@thepress.co.uk

John Moore

THE North Yorkshire Pension Fund deficit has reached more than half a billion pounds, leading to fears council services could suffer as employer contributions rise.

Figures obtained by The Press show that, as of March 2011, local authority pension funds had liabilities of £2.1billion, and assets worth £1.5billion, leaving a shortfall of £600,000,000.

North Yorkshire County Council (NYCC) has to make up a shortfall of £13.3 million this year, while City of York Council has to find more than £4.9 million, and Selby District Council must make up £659,300.

John Moore, corporate director for finance at NYCC and treasurer of the pension fund, said the shortfall would not affect anyone currently drawing a pension, and increases in employer contribution are factored into authority budgets.

He said: “There is a shortfall in the fund, which the actuary and authorities are aware of. Employer contribution rates are set for three years with the knowledge of that.

“The pension fund has a positive cash flow forecast for the next 15 years, and there is absolutely no problem at all with meeting pension payments for existing members.”

Coun Steve Shaw-Wright, Labour leader at Selby District Council, said: “On a county and district level, I’d like to know why it’s so much.

“It will have to come out of balances and reserves, which will mean more tightening of the belt. NYCC has a large reserve pot, but it is a big hit, and its money that could be spent on services.”

A spokeswoman for Selby District Council said: “We are aware of the council’s liabilities in relation to the pension fund and have factored these into our spending plans along with the other issues we, along with the rest of the public sector, are facing with regards to cuts to public spending.

“Our medium term financial plan requires us to save around £3 million by 2014/15. We are already well on the way to this target through the organisational changes we have implemented this year, changes which are designed to reduce our costs while maintaining essential services.”

Coun James Alexander, leader of City of York Council, said: “In common with many others, the North Yorkshire Pension Fund does have a projected deficit. All councils in North Yorkshire have been facing this problem for some time and now have a planned contribution rate to make up the deficit over a 30-year period.

“The reason for the deficit is that people are living longer, so the pension fund is paying out more for a longer period of time. The situation is not helped by the current global economic downturn in the financial markets, which affects all long-term investments such as pension funds nationally.”

Other employers which contribute to the North Yorkshire Pension Fund include Hambleton and Ryedale District Councils which have to make up shortfalls of £484,500 and £462,600 respectively.

Other employers which have shortfalls to make up are York St John University (£296,200), North Yorkshire Police Authority (£1,444,100), North Yorkshire Fire and Rescue Service (£74,400), Selby College (£30,600), and York College (£185,400).

A spokeswoman for York St John University said the shortfall would not affect services to students: “We have been working very closely with the North Yorkshire Pension Fund for several years over a considered approach to pension management. This means that we have been able to build changes in repayments into our long term processes.”