MOORABOOL Council faces future budget restrictions as a result of a superannuation payout worth $2.5million.
Under a Vision Super scheme, which ended in 1993, payments to council employees during retirement are fixed by a formula based on a final salary and the council has to pick up the tab for any shortfall.
Moorabool Council was advised at a Municipal Association of Victoria briefing last week that its share would be $2.5million.
Council chief executive Rob Croxford said that based on that estimate and current interest rates, the council would need to pay about $350,000 a year. Mr Croxford said the council would use the 12 months before the funds are required to consider the report and alternative strategies.
“Council has started to review its long-term financial plan to determine what combination of measures is possible in order to meet the obligation. During that time, we will investigate and determine whether the sector-wide options the MAV is pursuing can reduce the impact on individual councils and ratepayers, and in the best interests of Moorabool.”
East Moorabool ward’s Cr Russ Hendry said the council had just finished paying off $400,000 last year under the scheme. “It’s a bit scary,” Cr Hendry said. “It could affect future budgets; that’s $2.5million council won’t have for future projects.”
Vision Super chairman Rob Spence said councils were far from happy following talks on Wednesday. “They aren’t happy about it and we’ve had constructive discussions about solutions. They want us to look at legal options about reducing contribution taxes. We will also look at having talks with the state government about reducing WorkCover premiums. In the long term they want a way out of it.”
This is the fourth time in three decades that a call for contributions has been made to councils. The council will investigate how many employees have benefited from the scheme.
