Agenda item

Consideration was given to the report of Paul Thorogood, Director of Finance (OneSource) and this was presented to Cabinet by the Lead Member for Financial Management, Transformation and IT, Councillor Clarence Barrett.

This matter dates back to the abolition of the Greater London Council in 1986 when the London Pension Fund Authority (LPFA) was established to take over specific functions, in particular the former pension fund.

This liability is for the London Borough Councils to meet.  The total liability was assessed at £177.209 million with 90% of the liability (£159.488 million) to be met by The London Borough Councils.  The liability includes the former Greater London Council and the Inner London Education Authority.  However, Havering is not responsible for the latter.  The liabilities will be reviewed every three years when actuarial reviews will be undertaken.

The Havering contribution to the liability is assessed at £2.132 million which equates to 1.34% of the total liability which is proposed to be paid over a 30 year term.

The Council currently incurs an annual levy of £235,000 and this levy is included within the Council’s approved budget.

The repayment will equate to £71,000 per year over the 30 year term. And this will be funded from the Corporate Risk Budget.

The liability was initially challenged by two London Councils but as of 2010 this was not resolved.  If the liability is not met Central Government are likely to intervene to impose the levy.

On this basis, for the reasons set out in the report,

Cabinet:

• NOTED the liability that is payable to the London Pension Fund Authority towards the pension fund deficit of the Greater London Council which is currently assessed at £2.132m.
• RECOMMENDED to Full Council the approval of a payment of £2.132m towards the pension fund deficit of the Greater London Council over a period of up to 30 years.

• DELEGATED authority to the Chief Financial Officer to finalise the repayment terms of the liability with the London Pension Fund Authority.