SOLIHULL Council has revealed its pension fund is £121 million in the red - but Conservative leader Ken Meeson insisted: “No-one’s panicking.”
He said the it was not unusual for the fund to be in deficit and he was confident it would recover when the ailing financial markets picked up.
“It is a bit of headache - an accounting problem - but there’s nothing we can do about it,” he said. “If all our staff retired tomorrow on pension we would be in trouble. But obviously that’s not going to happen.”
Councillor Meeson’s comments come amid claims that the total pension deficit amonng local authorities in England, Scotland and Wales could be as high as £35 billion and council tax will be used to help fill the black hole.
The slump in share prices caused by the recession has hit pension scheme investments hard and added to the scale of the problem.
Birmingham City Council, the largest local authority in Britain, is reported to have a £1 billion fund deficit.
Cllr Meeson said Solihull Council would not follow the example of some other authorities and pump millions of pounds extra into their pension funds to help close the deficits.
And he could not see an end to the final salary pension scheme that his authority and others use and which have been criticised for being over-generous. “The unions wouldn’t agree to that,
“However, it may be possible to tackle the deficit problem by increasing employer and employee pension contributions,”
Cllr Meeson added that council employees in Solihull could no longer take early retirement and had to work until 60 to pick up their pension.