Telford Council pension scheme
Telford Council Pension
Author: Adrian Lawrence
Telford Council Pension
It is quite a welcome sight to see a government unit that really aims to do what it can to help or aid its constituents. We are assured that our taxes are really going to the right channels and is not being misused, misallocated or left idle. But what happens if despite well-meaning or noble intentions something still happens that is not entirely positive and could even jeopardise the money that you have contributed?
This is the dilemma that is actually being faced by the Telford & Wrekin Council.
Telford & Wrekin is a borough located in the West Midlands. The Telford & Wrekin Council is the unitary authority that has been tasked to oversee all of the local government services in the area. This includes education, libraries, social services, health and sanitation, as well as the distribution of certain social services.
The Telford & Wrekin Council has instituted a final salary scheme for its constitutents. A final salary scheme, otherwise known as a defined benefit scheme, is a very generous pension type. It basically pays you a guaranteed and set percentage of your final salary depending on your length of service.
The scheme, on paper, is quite beneficial and a great way of allocating money towards your retirement. But because of recent events, this final salary scheme has created a number of problems for the citizens of Telford & Wrekin.
The problem is centered around the deficit the Council has to contend with. As of March 2005, that deficit already stands at £91 million. There are a lot of factors that has caused this problem. One factor is that staff are living longer and their respective salaries are rising faster than inflation. This puts a burden on the scheme because it now has to pay ever larger amounts of pension to new retirees, and they have to do this for a longer amount of time than previously anticipated.
Secondly, the level of contributions are not rising quickly enough to bridge the growing deficit. Even if the amount of contributions are rising, it is still not enough to try to catch up with the deficit which is progressively ballooning.
Faced with these problems, the Telford & Wrekin Council still has to contend with the after effects of this problem. First, the government has taken away its tax credits, making it doubly harder for them because the council now has to deal with rising taxes that they are obligated to pay.
These compounding problems have not been ignored by the borough’s employees’ union, which is now threatening to carry out mass actions in order to bring attention to the problem of the final salary scheme. These employees are afraid that their contributions are now just being used to pay off retirees and that when it comes time for them to retire, there won’t be any money left for their pensions.
Clearly, drastic action is needed in order to solve this problem. The national government could possibly give assistance to the council in order to resolve the deficit and alleviate the worries of the staff, whose collective futures are being threatened by this grave problem.
Adrian Lawrence is a councillor on the Telford & Wrekin Council This article can be freely republished provided a working hyperlink remains.
Author: Adrian Lawrence
Telford Council Pension
It is quite a welcome sight to see a government unit that really aims to do what it can to help or aid its constituents. We are assured that our taxes are really going to the right channels and is not being misused, misallocated or left idle. But what happens if despite well-meaning or noble intentions something still happens that is not entirely positive and could even jeopardise the money that you have contributed?
This is the dilemma that is actually being faced by the Telford & Wrekin Council.
Telford & Wrekin is a borough located in the West Midlands. The Telford & Wrekin Council is the unitary authority that has been tasked to oversee all of the local government services in the area. This includes education, libraries, social services, health and sanitation, as well as the distribution of certain social services.
The Telford & Wrekin Council has instituted a final salary scheme for its constitutents. A final salary scheme, otherwise known as a defined benefit scheme, is a very generous pension type. It basically pays you a guaranteed and set percentage of your final salary depending on your length of service.
The scheme, on paper, is quite beneficial and a great way of allocating money towards your retirement. But because of recent events, this final salary scheme has created a number of problems for the citizens of Telford & Wrekin.
The problem is centered around the deficit the Council has to contend with. As of March 2005, that deficit already stands at £91 million. There are a lot of factors that has caused this problem. One factor is that staff are living longer and their respective salaries are rising faster than inflation. This puts a burden on the scheme because it now has to pay ever larger amounts of pension to new retirees, and they have to do this for a longer amount of time than previously anticipated.
Secondly, the level of contributions are not rising quickly enough to bridge the growing deficit. Even if the amount of contributions are rising, it is still not enough to try to catch up with the deficit which is progressively ballooning.
Faced with these problems, the Telford & Wrekin Council still has to contend with the after effects of this problem. First, the government has taken away its tax credits, making it doubly harder for them because the council now has to deal with rising taxes that they are obligated to pay.
These compounding problems have not been ignored by the borough’s employees’ union, which is now threatening to carry out mass actions in order to bring attention to the problem of the final salary scheme. These employees are afraid that their contributions are now just being used to pay off retirees and that when it comes time for them to retire, there won’t be any money left for their pensions.
Clearly, drastic action is needed in order to solve this problem. The national government could possibly give assistance to the council in order to resolve the deficit and alleviate the worries of the staff, whose collective futures are being threatened by this grave problem.
Adrian Lawrence is a councillor on the Telford & Wrekin Council This article can be freely republished provided a working hyperlink remains.
posted by Carolyn @ 2:30 PM
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