£249 million pensions deficit buried in agenda appendix
Full Council last week received a report that Islington is one of only four councils in the country to be challenged about its pension fund deficit by the Government Actuary Dept. This is a result of them flagging Islington’s situation as ‘amber’ – the 4th worst out of the 87 pension funds they investigated.
Green Cllr Caroline Russell said:
“This worrying situation was buried in the appendix to an agenda item innocuously titled as ‘Flexible Use of Capital Receipts strategy’. To understand the situation more thoroughly I looked back to see how things have changed over time. A brief google search revealed GMB secretary Gary Doolan worrying in a trade magazine, back in 2006, about a £131m pension deficit, claiming it was caused by bad investment decisions under the then Lib Dem administration. In 2011 the Guardian reported the pension fund was still £131million in the red.
But since 2011, the pension fund deficit has almost doubled to £249million, which has happened entirely under this Labour administration. The officers’ report presented councillors with 5 options to address the problem, although only two of them came recommended.
The council has sought legal advice from a QC which is reassuring but also worrying that it is necessary. How did things get this bad? The council needs to come clean.
On the night, I voted to agree the adoption of a flexible capital receipts strategy as it appears to be the least worst option of those on offer, but I’m enormously concerned to hear that Islington’s pension fund is in this worrying state. I will be monitoring the council’s progress closely.”
Notes:
1. Council report “Flexible Use of Capital Receipts strategy”
2. Appendix to the report with all the worrying details re risks etc
3. Link to Caroline’s speech