UK - Fears have surfaced within The Labour Party over the liquidity of its pension scheme, which holds a "dangerously high" 83% allocation to equities.
Actuaries believe up to £6m could have been wiped off the fund since its last valuation, leaving it with an estimated deficit of £1.5m.
The Labour Party has also been accused by members of “raiding the surplus” of its £30m pension scheme.
In a letter to party treasurer Jimmy Elsby – seen by IPN’s sister publication Professional Pensions – one disgruntled scheme member requested an explanation to why the scheme’s normal contributions were offset by a £75,000 “amortisation” expense of the fund.
The Labour Party director of finance Stephen Uttley explained that the amortisation expenses were incurred as a result of a “short contributions holiday” resulting from a surplus that arose back in 1992. But he did not address the issue of its 83% equities allocation.
The fund’s last triennial valuation – carried out on December 31, 2001 – showed a £4.48m surplus.
Uttley admitted that the market value of fund investments fell by 17.5% in 2002, but could not confirm whether the fund was currently in surplus or deficit.
He said: “On December 31, 2001 we did have a cushion of £4.4m and assets of £30m.
“If there is a deficit we will take actuarial advice and increase our contributions if we have to.”
The 2002 valuation is due to be filed with the electoral commission by July 7.
Labour MP for Birmingham Selly Oak, Lynne Jones, said she would not be surprised if the scheme was in deficit.
“One would have expected them to have diversified their risks as much as possible.
“Now difficult decisions may have to be made.”
A Labour spokesman stressed that the party was committed to keeping its final salary scheme open.
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