Welshpool taxpayers facing £215,000 pensions bill
Wednesday 2nd February 2011, 6:19PM GMT.
Taxpayers in Welshpool are facing a £215,000 bill to cover a shortfall in pensions for town council staff who retired more than four years ago, it has emerged.
Welshpool Town Council said it had been told that it had not been paying enough into Powys County Council’s pension fund.
But Robert Robinson, town clerk, said: “We have never been told that we weren’t paying enough and had no idea we had a shortfall until last year,” he said.
“It came completely out of the blue and now we’ve been told that we owe £215,000 and it must be paid back over a period of time.
“The council, which has taken on the shortfall in pension contributions for past staffing, is saying that the shortfall comes from nine former members of staff. But these people retired four years ago, in fact one retired at least 12 years ago.
“I have taken advice on the matter and feel that it needs to be challenged and I also intend to challenge the validity of the county council being able to seek shortfalls when they manage the fund,”he added.
Lee Evans, spokesman for Powys County Council, said: “The town council was informed of what shortfall recovery contributions are required to clear the shortfall over a proposed 25-year recovery period, starting with a £10,400 payment in the next financial year.”
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its ok,
just claim more from the English…
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Well, just to put it into perspective, that’s “only” £36195 per ex-employee requested from the council, if you consider that any additional tax that would need to be raised to pay the sum would come from taxpayers who have to pay income tax and NI on their gross earnings before even getting to council tax, VAT, etc. To get a figure of £215000 into the coffers, means that average taxpayers have to earn (approximately) £325757 of gross pay to end up with the final nett figure.
I think that we’ll see this to be the tip of the national iceberg. As public pension providers struggle to make a return on their portfolio during recession, they will make more and more call on taxpayers to meet the obligations of the final-salary sums promised to public workers.
I’m not sure, however, why a pension fund should have easy access to public money if they have been unable to turn contributions into lasting benefits.
And before anyone criticises me for emphasising the public sector, please allow me to point out that the private sector don’t have the ability to ask taxpayers to stump up to meet any of their shortfalls.
That’s why most private sector employees don’t have final-salary schemes, but are left to rely on the vagaries and uncertainties of the financial products that make up their providers’ portfolios.
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