Barnet privatisation could leave taxpayers footing a �25m pension hole
Barnet Council’s pension fund could spiral into massive deficit with taxpayers forced to foot the bill.
Council plans for large-scale privatisation with a push for staff to contribute more to pensions could lead to a fund crisis, argues a Unison-commissioned report.
A mass of people leaving the scheme will mean the council paying out more than is coming in from remaining subscribers, the study predicts.
The fund stands at �22.9million but a cash fall of up to �55.9million by 2012 will leave it �25million in the red, say report authors First Actuarial.
Finance boss Cllr Daniel Thomas said the report seemed tossed together in a hurry and made misleading assumptions.
He said: “Our actuaries have been clear that, on any realistic assumptions, the council’s pension fund will remain cash positive at current employers’ contributions through the foreseeable future.”
On Tuesday (September 13), hundreds of council staff went on strike over the privatisation plans.
- 1 I want to philately! Freddie Mercury’s stamp collection goes on display
- 2 Bentley Motor blue plaque in North London 'prized off wall and stolen'
- 3 Five classic Rolling Stones moments at BST Hyde Park
- 4 Alexandra Palace: 2 hospitalised in Red Bull's Soapbox Race
- 5 In pictures: Wacky racers descend on Alexandra Palace for soapbox challenge
- 6 Fences and padlocks at Primrose Hill once again
- 7 Opening date confirmed for new Finchley Road Aldi
- 8 Camden watchmaker launches crowdfunding campaign
- 9 Free beach returns to Finchley Road for the summer
- 10 Start-up delivers home cooked meals to your door
Chief executive Nick Walkley put up three metre-long “open letters” at the town hall last week saying that, despite a “significant commitment” from the council, union leaders had rejected the pensions offer.
New employees, taken on by private firms, will not be offered the same pension deal as existing employees.
Current council workers transferred to the private sector will have their pension plan safeguarded for a year.
Unison branch secretary John Burgess said: “The people who are taking over council contracts have been told they have to deliver massive savings. One of the ways which would reduce their ability to do that would be if they don’t have to pay the contributions. That’s their saving which they can take back to the council.
“The council has put itself into a double bind. It’s a risk to workers and residents.”