Shadow Minister for Intergovernmental Relations Chris Hartcher has called on the Minister for Local Government Barbara Perry to investigate the Local Government Superannuation Scheme (LGSS).
The move follows action taken by LGSS to ask local councils in New South Wales to contribute more funds to its defined benefit scheme.
According to Hartcher, the contributions requested from councils include, $2.5 million for Gosford, $3 million for Wyong, $2.7 million for Shoalhaven, $900,000 for Ryde, about $800,000 for Ballina and Dubbo, $600,000 for Richmond River, $900,000 for Maitland and $525,000 for Kogarah.
"These massive contributions follow a 'contribution holiday' in the last five years, when councils were advised that contributions were not necessary because of the performance of the fund," Hartcher said.
The [defined] benefit fund, however, declined by 8 per cent to June 2008 well before the global financial crisis had an impact on the markets, Hartcher said.
"There is no excuse for the poor performance of the fund and it raises question about the way the fund is managed," Hartcher said.
"I also have concerns about a heavily politicised board which apparently has no fund management skills. When I become Minister in 2011, LGSS will be firmly in my sights."
"The recent contribution increase imposed on councils was instigated following actuarial advice and was necessary in order to protect members' entitlements as a result of asset values having fallen over the past 18 months," LGSS chief executive Peter Lambert said in a separate statement and not in a response to Hartcher's comments.
"Despite the current challenging environment, the defined benefit schemes remain in a strong financial position."
