Councils under fire for large pension payouts
Councils in Hampshire have come under fire for spending millions of pounds on expensive pensions for their employees.
A report by the TaxPayers' Alliance has named and shamed Hampshire County Council for spending 57.8 million on contributions to final salary pension schemes between 2007 and 2008.
Final salary pensions – sometimes referred to as 'gold-plated' pensions – guarantee participants an income when they retire, and are rarely offered by the private sector because they are too expensive.
Critics say it is extravagant for councils to offer the more expensive schemes.
Hampshire's figure is the fourth highest in the country, and is an increase of 11.5 per cent on the previous year.
Hampshire also ranked 15th out of 461 councils for the number of councillors in its pension scheme, because 36 out of 78 councillors are contributing towards pensions.
Traditionally, councillors do not receive pensions as their time and costs are covered by allowances.
Maria Fort, policy analyst at the TaxPayers' Alliance said: 'Gold-plated public sector pensions place a stranglehold on council budgets. They are unjust, unsustainable and unfair to ordinary people, many of whom have had to postpone their own retirement or seen their private pensions reduced to nothing.'
Hampshire council leader Ken Thornber defended the policy, saying: 'The average payment the pensioners receive is less than 4,000 a year.'
Portsmouth City Council also came under fire for spending 15,782.46 on contributions towards councillors' pensions between 2007 and 2008. This year, the figure rose to 17,628.02.
The city council spent 13,274,899 on employee pensions in total last year, an increase of 5.6 per cent from 2006-2007.
Cllr Gerald Vernon-Jackson, leader of Portsmouth City Council, defended councillors such as himself who join pension schemes: 'As councillors we get paid a great deal less than officers. I am paid 25,000.
'It is sensible to plan for my old age and I would expect to receive a pension in any job.'
City Tory leader Steve Wemyss said: 'The pensions are compensation for the loss of those hours of income which councillors may receive a pension for.'
Richard Stokoe, of the Local Government Association, said that the rise in contributions from councils towards employees' pensions were due to changes in the local government pension scheme and because pensioners were living longer.
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Friday 25 May 2012
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