Data compiled by The TaxPayers Alliance shows local authorities across the country spent a total of £4.5bn on employer contributions to the Local Government Pension Scheme (LGPS) in 2007-2008.
This does not include employee contributions, nor employer contributions to the Teachers’ Pension Scheme. The average council now spends over £9.8m on employer pension payments – an inflation-busting 7% increase on the average amount spent in 2006-2007.
Employee contributions are between 5.5% and 7.5% of salary, depending on the grade of pay, but employer contributions can be far higher.
Birmingham Council spent the most on its pensions, with £82m, an increase of 9.8%. Others near the top of the spending table included East Sussex (£67.2m), Lancashire (£65.6m), Hampshire (£57.8m) and Kent (£53.9m). The largest increase in spending was in Coventry, which saw a 232.1% rise from £5.6m to £18.6m.
Privately, LGPS managers agree spending must be reined in after the next general election.
One commented: “We will see both benefits cuts as well as increases in employee contributions. They should have increased to at least 7.5% average, instead of the 6.3% that resulted from the 2008 scheme.”
Cost-sharing and a career average scheme are also widely believed to be on the cards.
