County’s pension fund ‘more than a billion short’

Hampshire's pension fund has a deficit
Hampshire's pension fund has a deficit
Fareham Community Hospital in Salisbury Green

Picture: Paul Jacobs

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A PENSION fund which should pay out to thousands of public sector workers is short of £1.3bn.

Hampshire County Council runs a £3.6bn pension pot covering 49,000 workers at the council, Portsmouth City Council, district authorities and the University of Portsmouth.

But its Pension Fund Panel was yesterday told by a government body it had a £1.256bn shortfall, based on the number of people who are signed up to the scheme.

But Hampshire County Council leader, Councillor Ken Thornber, said no action to address the deficit was needed.

He said: ‘The fund is in a strong position. The current value of the fund is at an all time high of £3.558bn and there is more being paid into the fund by contributors than the benefits paid out, resulting in an annual surplus of around £65m. The deficit is theoretical, an estimated financial shortfall at today’s prices if the scheme closed tomorrow and had to pay pensions to all current staff in addition to paying existing pensioners, a highly unlikely scenario.

‘Liabilities will not all be payable straightaway.

‘Instead they will fall as existing employees reach their retirement age, so we have a phased scheme to make up the defecit.’

The fund invests contributions made by over 48,000 contributors and their employers in shares, bonds and property, and pays pensions and benefits to over 30,000 retired employees.

The average Pension paid in 2010-11 was £3,992.

Employees included in the fund pay in 5.5 to 7.5 per cent of their annual salary.

Other public sector workers, including police officers, firefighters and teachers, have separate pension schemes.