|Council plans ahead for unfunded superannuation liabilities |
Colac Otway Shire Council has saved ratepayers $12,000 by putting aside money and paying a call for unfunded superannuation liabilities early.
Council paid the $568,000 call on March 31 this year, three months earlier than required.
For the past two years Council has put aside $166,000 as part of its annual budget process in anticipation of a call to top up defined benefits superannuation schemes, which closed to new members in the early 1990s.
Government agencies across Australia face unfunded superannuation liabilities, which are the difference between the amount of money in superannuation schemes and the amount that will have to be paid out.
Chief Executive Officer Rob Small said that while Council did not know exactly what the shortfall would be worth, it was worthwhile putting money aside.
“Our finance department worked with Council to estimate what the next call would be worth and allocated money as part of our last two budgets,” he said.
“While we hadn’t put aside the entire amount, the money we had prepared enabled us to pay early and save $12,000.”
Mayor Brian Crook said that while the unfunded superannuation liabilities were always a burden on ratepayers, Colac Otway Shire Council had strived to minimise the impact.
“Many councils around Australia will have to borrow the money for their superannuation liabilities, as we had to in 2003-04,” he said.
“We haven’t had to borrow, amounting to additional savings for our ratepayers.”
April 20, 2011