Corangamite Shire considers early payment

CORANGAMITE Shire Council will hold a special meeting on Tuesday night to consider paying its $2.9 million superannuation liability early, which will save it $97,000

Councillors will consider a report outlining the discount benefits of making payment before the July 1 deadline.

Glenelg Shire Council voted last month to pay early and save about $60,000. 

Warrnambool City Council ($4.77m bill) will consider the issue in a few weeks, Moyne Shire Council ($2.79m) is likely to make a decision by March, while Southern Grampians ($2.87m) and Colac Otway ($3.1m) shire councils will also consider early payment.

Corangamite Shire’s chief executive Andrew Mason said the payment would come through dipping into cash reserves, adjusting the capital works program and internal efficiency measures.

“We’ve identified about $800,000 in savings and about a third of the bill would come from cash reserves,” he said.

“The council finances will still be in good shape, but it will mean future budgets will have to be prudent and conservative while we rebuild cash reserves.

“We’ll be recommending to councillors that in future budgets several hundred thousand dollars be set aside each year for later calls on the superannuation fund.

“It will give us some capacity to pay off these bills.”

Mr Mason will present a report on the issue to councillors at an open meeting in the civic centre starting at 5pm.

“It’s certainly a good opportunity now because we are well into our capital works program and it’s easier to identify what can be delayed,” he said.

Warrnambool mayor Michael Neoh said a special report was being prepared by senior officers outlining options of paying early.

“It will come to an open council meeting either late this month or early February,” he said.

Across Victoria, councils, libraries and other entities face a combined $453 million shortfall in the defined benefit plan of the Local Authorities Superannuation Fund.

The scheme, which was closed to new members in 1993, has guaranteed payments to employee members for all their retirement  and will be active until the last dependant dies.

Employers  must top up the funds to cover shortfalls in investment performance.pcollins@fairfaxmedia.com.au

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