Business and domestic ratepayers face a hike in district rates as a result of a dramatic fall in the value of Northern Ireland’s local government pension scheme because of the global financial crisis.
Northern Ireland’s local government pension fund lost £600m in value between January 2007 and the beginning of this year, a Freedom of Information request to the fund — run by the Northern Ireland Local Government Officers’ Superannuation Committee (NILGOSC) — reveals.
It dropped in value from £3.088bn to £2.469bn.
Falling asset values have increased the scheme’s deficit, |valued at £396m in March 2007. Employers’contributions were 13% of staff pay in early 2007, they will be 17% next year and are likely to rise to 18.5% in 2011, says NILGOSC.
Councillor Helen Quigley, NILGSO president, said that district councils would “continually monitor” the value of the pension schemes’ assets, but conceded that rises in district rates were likely.
“The revaluation of the scheme, will not take place until March 2010 and any resulting increase would not take effect until March 2011. We therefore do not expect any major hikes in contribution rates in the short term but do anticipate that a phased increase may be necessary, depending on the rate of recovery in the wider economy.”
Deane Morrice, secretary of NILGOSC, said that the fall in his scheme’s asset values had recovered by £229m between January and May, as stock markets began to improve.
“NILGOSC is a long term investor and can ride out short-term falls in the markets because it spreads investments in different asset classes to minimise the |impact of one or more market events,” Morrice said.
He added that the fund was in a strong position overall, as there are more contributing members than pensions, it raises £15m a year more from contributions than it pays out in pensions and benefits and earns £60m a year from dividends and rental income.