WHITTLESEA council is lobbying the state and federal governments to remove a superannuation black hole which cost it $6.8 million this year.
Councillor Mary Lalios said about 60 council staff were members of an old scheme, the Local Authorities Superannuation Fund Defined Benefit Plan, which required councils to top up reserves if the fund’s investments fell.
“It is a ridiculous scheme which has to be fully funded in the event of every member dying or a mass walk off the job on the same day,” Cr Lalios said.
She said the plan was hit by the global financial crisis and councils must make up losses. Whittlesea council had to pay $6.8 million to help top up a $396 million shortfall.
Cr Lalios, who was recently appointed as the deputy president of the Municipal Association of Victoria, said the council had paid out the entire amount from its unallocated budget funds in February.
“They are called unallocated funds, but that money is for community facilities; we could have built an activity centre or 10 or 15 playgrounds. This year’s council budget is tight, we are a growing city and it is unfair to expect us to face the possibility of a further call for top-up funds if the [share] markets go down in the future.”
She said she successfully moved two motions in a recent council meeting for the council to lobby the state and federal governments to change the scheme and bring it into line with other superannuation funds.
“Governments have unfunded schemes where when people leave or retire they have the funds to pay them; not the ridiculous situation of having enough money to pay every member out on one day,” she said.
