Pension 'black hole' identified in Bristol area

A "black hole" in the pension funds of nearly 80,000 council workers in the old Avon area has been identified, the BBC has learned.

The Avon Pension Fund's deficit has more than doubled in the past year to over £1bn.

The fund works with Bristol city, North Somerset, Bath and North East Somerset and South Gloucestershire councils.

A spokesman from the fund said its investment strategy was developed to cover a time frame of over 25 years.

The fund is the 12th largest in the Local Government Pension Scheme and is administered by Bath and North East Somerset Council.

Market forces

At a recent meeting, the Avon Pension Fund committee was told that in 12 months, the value of the fund had increased by 10% and stood at £2.7bn.

But the liabilities - what it will have to pay out in pensions - had jumped by 32% to just under under £4bn.

The deficit has risen from £552m to more than £1.2bn in a year.

The fund has fallen victim to market forces and more council staff are retiring or volunteering for redundancy and taking their pensions early, so there is an increasing demand on the available money.

'On track'

In a statement, the Avon Pension Fund spokesman said: "The fund is well managed with investment returns ahead of the average local council fund over both the last year and the last three years.

"The fund's actuary reviews the funding position regularly to ensure the funding plan is on track to meet liabilities as they are due.

"All investment decisions are taken with the long-term picture in mind and in the interests of both Avon Pension Fund members and the local taxpayer.

"The strategy is kept under regular review."

Rowena Hayward, from the GMB union in Bristol, who is a member of the fund's committee, added: "For those people who are in receipt of their pension and for those coming up to accessing their pension, there is absolutely no issue that they won't get their pension and there isn't sufficient funding in the scheme."

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