A CAMPAIGN by Glenelg Shire Council for contributions to fund a challenge to the crippling bills for a controversial superannuation scheme has failed to get a cent from Warrnambool City Council.
The shire has written to all Victorian mayors and chief executives expressing concern on the quantum and unpredictability of the Vision Super Defined Benefits Scheme obligations, which will cost south-west councils about $20 million in July.
Glenelg decided in July to ask councils to put into a special fund to pay for independent legal advice on options to limit the likelihood of future calls for shortfalls in the scheme.
It also supported a push to have councils exempted from federal contributions tax and Victorian WorkCover liabilities associated with the scheme.
Moyne Shire Council last month also voted to explore the possibility of withdrawing from the fund.
Warrnambool City Council corporate strategies director Kevin Leddin said it had legal advice that withdrawal from the scheme would be extremely unlikely.
“Employers are required to meet all future obligations under the scheme until the last beneficiary has gone,” he said.
“Our council will not be contributing to a legal fighting fund because we are advised there’s not much room to move on the issue of withdrawing.
“However, we will be supporting the lobbying being led by the Municipal Association of Victoria seeking to have the contributions tax and WorkCover levy reviewed.
“A 15 per cent tax applies to all contributions in and out of the fund and the WorkCover liability also applies to payments into the super scheme.”
Glenelg Shire Council warned the future obligations of the scheme were so great they undermined financial stability of local government.
“Proposed and past top ups to the scheme should not be treated as normal contributions so should be exempt of WorkCover contributions, federal and state taxes,” the council said.
“Agreement is essential as the current situation is unsustainable.”
Although the fund closed to new members in 1993, it will stay until the last member or their approved dependant dies and is likely to require regular top ups to counter declining returns on investments.