Council staff pension black hole of £268m

A £268 million shortfall has been uncovered in Walsall Council's workers' pension fund, it has been revealed.

The figure emerged in the authority's newly-released draft statement of accounts and was today described as "worrying".

Walsall is one of a number of councils in the region which participates in the West Midlands Metropolitan Authorities Pension Fund. Despite the deficit, the annual report says the borough's shortfall has reduced from £290 million last year. It also suggests the fund will "continue to generate" more cash.

This will help fund to workers' pensions through its assets.

Peter Last, chairman of Walsall Pensioners' Convention, said: "It's horrendous that they've allowed the shortfall to increase to such a level. I imagine that is very worrying for council workers.

"It's especially worrying because people aren't getting enough from the Government. It wouldn't be so bad if the the state pension was a bit better, because at around £90 it's not much of a safety net.

"A lot of pension funds have shortfalls nowadays and I would have thought a lot of the other councils in the West Midlands show similar figures. Perhaps we could start using the politicians' expenses to start making it up."

The draft statement of accounts, which will go before a special meeting of the council's Audit Committee next Monday, said: "As at 31 March 2009, there is an actuary calculated shortfall for Walsall of £268.105m between the forecast cost of future pensions and the value of the assets currently within the pension fund.

"The forecast pension payments will be paid out over a period of many years, during which time the assets will continue to generate returns towards funding them.

"In addition, future changes in the equity market will adjust the value of the fund assets."

The news comes as the funding position of the UK's 7,400 defined benefit pension schemes improved slightly during May on the back of rising stock markets. Their collective shortfall was down from £188.5 billion to £179.3bn. Their funding position has still deteriorated sharply in the past year.

No-one was available for comment at Walsall Council.