TAXPAYERS could end up paying for a £419million shortfall in the pension scheme for local government employees.
That is the fear of Stratford district councillor Peter Moorse who has expressed concerns about the cost of running Warwickshire’s fund.
The average outlay in shire counties across England in 2012/13 was around £113 for each recipient. This covers fees paid to those managing each fund and administrative costs.
But the annual report by Warwickshire County Council reveals its costs were almost 50 per cent higher at £167.55 per recipient.
Speaking to the Observer, Coun Moorse said: “Ultimately these costs all fall back on the taxpayer or the staff of the council through higher contributions. The lower the costs the better it is from the taxpayer’s point of view.
“This is a long-term problem which doesn’t necessarily affect this year’s tax rates but will in years to come.”
The Warwickshire Pension Fund is part of the Local Government Pension Scheme and is administered by Warwickshire County Council.
It has more than 39,000 members from many of the county’s public sector bodies including the county council, the five district and borough councils, Warwickshire Probation Trust and several academy schools.
The council said running costs must be considered alongside investment returns which had consistently outperformed the national average. This has resulted in the fund’s total value increasing month-on-month since May 2012 and contribution rates remaining low for its active members.
A spokesperson added: “It is a false economy to reduce investment expenses if this just results in lower investment returns. That would be like cutting off your nose to spite your face.
“The Warwickshire Pension Fund already has a plan in place to repay the deficit and again this has been verified by an independent actuary.”