WYNDHAM Council will need to find an extra $10million from July 1 next year to pay its share of a shortfall in a council employee superannuation fund.
The Local Authorities Superannuation Fund, which was closed to new members in 1993, has a shortfall of $396.9million, which Victoria’s councils are required to make up.
The LCAF, known as Vision Super, is a defined benefit scheme that covers past and present council employees who began work before December 1993.
Under the scheme, employees are given a guaranteed amount when they retire. The scheme requires that councils make up any shortfalls when investments fall.
Wyndham Council has been asked to provide $10.8million.
CEO Kerry Thompson said the council was working through available payment options and did not know what impact the shortfall would have on future budgets. In a bid to ease the pressure on council finances and ratepayers, the council has backed a Municipal Association of Victoria campaign calling on the state government to manage the scheme. Ms Thompson said one option being considered by councils was borrowing money from the government, at reduced interest rates, to fund the shortfall.
MAV chief executive Rob Spence said the old scheme was a “volatile and unpredictable model”. “We’re hopeful that a show of unity by local government will help to secure a transition back to a state-managed scheme that removes the requirements for councils to make top-up payments.”
