MOORABOOL Shire Council faces future budget restrictions as a result of a $2.5 million outdated superannuation payout.
Under a Vision Super scheme which ended in 1993, payments during retirement are fixed by a formula based on a final salary, and the council has to pick up the tab for any shortfall.
The council was advised at a briefing last week by the Municipal Association of Victoria 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 it has before the funds are required to fully consider the report and alternative strategies in the months ahead.
“Council has started to review its long term financial plan to determine what combination of measures is possible in order to meet the obligation,’’ he said.
‘‘During that time, we will also investigate and determine if the sector-wide options the MAV is pursuing can reduce the impact on individual councils, ratepayers and are in the best interests of Moorabool.” ‘
East Moorabool ward’s 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 $2.5 million 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,’’ he said.
‘‘They want us to look at legal options about reducing contribution taxes.
‘‘We will also look at having discussions 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 Local Government.
The council will conduct a report into how many current and former council employees have benefited from the scheme.