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Alderney pensions deficit doubles

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UK - The States of Alderney, part of the British Channel Islands, has reported the deficit in its staff pension scheme had doubled by the end of 2008 as a result of the economic downturn.

Figures from the State Accounts for 2008 highlighted in the Billet D'Etat, or agenda, for the next Meeting of the States on 22 April 2009, showed a "snapshot" of the pension fund's financial position at 31 December 2008.

An extract from the scheme actuary's report showed the deficit of the staff pension scheme had more than doubled from £172,000 to £368,000 (€417,778) "due to the current economic situation".

However, the accounts from the Policy and Finance Committee noted the projected deficit is based on the assumption that half of the members that joined the scheme before 1 January 2006 will retire at age 60, but if the assumption is reduced to just 25% reducing at age 60 then the projected deficit would fall to £209,000.

The assumptions refer only to members that joined before 1 January 2006 as after this date the normal retirement age for new entrants to the scheme was raised from 60 to 65. However, the true value of the actual value of the deficit will not be confirmed until the triennial actuarial review of the scheme is completed this year.  

Alderney, which has a population of just 2,400 people, is experiencing similar problems to the rest of the Channel Islands, as Jersey's public sector scheme had a deficit of £146m at the end of 2007 and Guernsey's superannuation fund dropped £142m in 2008. (See earlier IPE article: Guernsey superannuation fund drops £142m)

Meanwhile, Guernsey is also in the process of consulting on possible reforms to the state pension that pays retirement benefits to residents of Guernsey and Alderney, including raising the retirement age to 70 by 2050, as it is estimated the Guernsey Insurance Fund could run out of money by 2040 if no changes are made. (See earlier IPE article: Guernsey consults on state pension reforms)

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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