Failure to remit contributions by struggling members worsened the deficit position of the Local Authorities Pension Fund (LAPF) to $13,2 million for 2014, up from $8,5 million the previous year with its viability under serious threat, latest financial results show. While contributions and investment income were marginally up to $31 million from $29 million and $6,9 million from $6,4 million respectively, a rise in expenditures eroded earnings of the pension fund.
Rentals were up 29 percent during the period to $6,5 million.
At the close of the year, LAPF had 60 percent of its investments in fixed property, 34 percent in equities and six percent in the debtors market.
The contribution’s impairment levels shot up to $120,1 million from $90 million in 2013.
“The fund’s financial and actuarial positions are extremely precarious. Efforts to reign in the incessantly ballooning contribution debtors’ book have to date, failed to produce positive results,” the LAPF.
“Accordingly, the fund is bedevilled by critical liquidity constraints.”
At the end of 2014, the pension fund had 12 353 beneficiaries up from 11 807 in the prior year, while the number of contributing local authorities, including town and rural district councils remained unchanged at 46.
Given the increasingly difficult economic environment, the fund is not envisaging a return to financial health in the near term.
“The trustees have an obligation to continue with efforts that would resolve the fund’s mammoth financial difficulties and nurse the fund to normalcy,” the committee said.
“Furthermore, the trustees will in tandem with these efforts, look at other options that would safeguard the interests of all members.”
In the meantime, auditors Deloitte and Touche also warned against the LAPF’s persistent negative actuarial position which stood at $368 million at the end of December 2014.
“This actuarial deficit also represents a material uncertainty that affects the fund’s going concern assumption,” said Deloitte and Touche. — New Ziana.