Welshpool Town Council is facing up to a £215,000 bill to cover a shortfall in pension payments for current and retired staff.
The council said it had been told that it had not been paying enough into Powys County Council’s pension fund.
But Robert Robinson, town clerk, has been reported as saying: “We have never been told that we weren’t paying enough and had no idea we had a shortfall until last year,” he said.
“It came completely out of the blue and now we’ve been told that we owe £215,000 and it must be paid back over a period of time.
“The council, which has taken on the shortfall in pension contributions for past staffing, is saying that the shortfall comes from nine former members of staff. But these people retired four years ago, in fact one retired at least 12 years ago.
“I have taken advice on the matter and feel that it needs to be challenged and I also intend to challenge the validity of the county council being able to seek shortfalls when they manage the fund,”he added.
But Powys County Council insists the town council has been kept in touch with the situation and has not accepted an invitation to discuss the situation.
A spokesperson for Powys County Council said: “We are the administering authority for the Powys Pension Fund, which provides pension benefits under the statutory terms of the Local Government Pension Scheme for all eligible employees of Powys County Council and other participating bodies, including Welshpool Town Council.
“Our Pensions Fund’s Actuary, who is an independent consultant, produces a report on the Fund's financial position every three years and we sent Welshpool Town Council a letter about the 2010 actuarial valuation results and the impact it would have.
“The £215,000 shortfall relates to current and former employees of the Town Council. It has arisen for a number of reasons such as investment performance and increased mortality. The Town Council was informed of what shortfall recovery contributions are required to clear the shortfall over a proposed 25 year recovery period, starting with a £10,400 payment in the next financial year.
“A number of factors are considered by the Actuary when he produces his report and the shortfall is likely to alter when the next valuation takes place, being due at 31st March 2013.
“We invited the Town Clerk to meet with the Pension Fund Actuary to discuss the valuation and to explain what the results mean for the Town Council and to explore other flexibilities for dealing with the issue of the shortfall but to date, the invitation has not been accepted.”
