Pension pots for council workers in nine West Midlands local authorities are more than £3 billion in deficit, the Express & Star can reveal today.
The enormous sum has been revealed in official accounts for Wolverhampton, Dudley, Sandwell, Walsall, South Staffordshire, Cannock Chase, Stafford, Staffordshire County and Wyre Forest councils.
The gap between the value of assets and the amount committed to current and former council workers increased by more than £600 million over the past 12 months. The four Black Country councils have run up a pension black hole of £2,172,744,000 between them.
Campaigners today said it proved the case for urgent reform of the public sector pension system to require workers to pay more towards their retirement.
Robert Oxley from the TaxPayers’ Alliance, said: “Councils and trade unions have been putting off what they need to do but if someone does not do something about this deficit it will be taxpayers left to pick up the bill. People are living longer and those workers who benefit from a generous public sector pension should be prepared to pay a little more towards it.”
It is the second consecutive year that the deficit has increased. Dudley Council’s accounts show its pensions shortfall was £280.9m in 2010/11. The following year it was £355.8m and it now stands at £469.2m. Sandwell Council has the biggest individual pensions hole in the Black Country at £670.9m, while Wolverhampton’s shortfall is £551m and Walsall’s £480m.
Staffordshire County Council has a shortfall of £809.7m, while there is a £25.4m shortfall in South Staffordshire, £58m in Cannock Chase, £45.3m in Stafford and £53.1m in Wyre Forest.
Antony Ellis, spokesman for the West Midlands Pension Fund, said the fund is currently undergoing its three-yearly valuation, which would give a ‘more accurate calculation of council deficits’.
This valuation will also assess whether councils will need to increase their contributions to the fund as employers. Staffordshire County Council’s deputy leader and cabinet member for finance Ian Parry said: “It is important to note that the deficit of local government pension schemes is a national issue and not Staffordshire specific. We are working hard to carefully manage the additional cost of pensions and have planned for this position in our budget.”
Reforms of local government pensions are due to be introduced from next year and will end final salary schemes. Instead, council workers will get pensions based on career average earnings.