Magazine article Public Finance

Scots Councils Face £4.5Bn Pensions Bill

Magazine article Public Finance

Scots Councils Face £4.5Bn Pensions Bill

Article excerpt

Councils in Scotland face continuing increases in pension fund contributions to meet a liability that has grown to £4.5bn, Audit Scotland has warned.

In a report published this week, the public sector watchdog said councils' contributions as employers increased from 220% of employees' contributions in 2002/03 to 250% in 2005/06 - and will need to rise further.

'This is an area of continuing concern that will place additional pressure on resources,' Audit Scotland stated.

According to the report, which gives an overview of local authority audits, the £4.5bn net pension fund liability of Scottish councils at March 31, 2005, compares with £1.9bn in the previous year.

The report noted that, in common with all pension schemes, greater life expectancy means that pensions are paid over longer periods.

Pointing out that a full valuation of each of the pension funds is expected to be reported in March 2006, Audit Scotland said this was likely to result in further increases in contributions, which councils would have to fund.

The pension liabilities disclosed in police and fire authority accounts increased by around 31% in 2004/05 to £6. …

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