Pension deficit for local councils in England and Wales could be £60bn, Lib Dems warn

The pension deficit for local councils in England and Wales could have reached £60bn – more than double the level three years ago, the Liberal Democrats have warned.

Using the Freedom of Information Act, Lib Dem pensions spokesman Steve Webb found 83 of 87 local authorities were in deficit at their last official valuation in 2007. Deficits have grown by more than 280% on average, according to independent valuations conducted by 10% of funds since then.

If this was replicated across all pension funds, the next valuation – due in March – would uncover a deficit of more than £60bn, the BBC has reported.

The pensions deficit was valued at £27bn in 2007.

The government is expected to announce proposals on how to reduce deficits early this year.

In March 2009, it was revealed the funding shortfall of final salary pension schemes in the private sector had doubled in the past 12 months to reach £219bn – the highest recorded deficit since 2004.

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