BALLARAT City Council will save $700,000 by paying its $10.5 million superannuation bill immediately.
The council received its share of the Defined Benefits Scheme $380 million local government shortfall last week and will pay it straight away, rather than next year’s July 1 due date, to avoid compound interest fees.
Mayor Mark Harris and the council’s chief executive officer Anthony Schinck will also lobby to be part of a statewide taskforce to review the Vision Super scheme, which is for local government employees and must be fully funded at all times.
Mr Schinck told last night’s Ballarat City Council meeting an interest debt of $1500 had been accruing on the $10.5 million bill daily since January.
The payout was initially expected to be only $4 million but the council was told in June its payment had risen by $6.5 million, along with all super bills across all Victorian councils.
“If we had waited and paid it on the due date, we would have to pay significantly more,” Mr Schinck said.
Councillor Judy Verlin said Ballarat had had “a bit of a falling out” with the Municipal Association of Victoria over the superannuation bill, with the council claiming the MAV should have known more about the overall $500 million scheme shortfall.
“Other councils are now trying to come to grips with it while Ballarat was very public about it from the start,” Cr Verlin said.
Mr Schinck said the council would now make a $4 million provision every three years to avoid any further unexpected bills.
“If the scheme somehow turns around, and I will say it has to be much better managed than it is now, then it will be a windfall for future councils,” Mr Schinck said.
After a meeting with the MAV, Mr Schinck said the date of the super bill had now been changed to flow better into the council’s financial planning.
He said there were also calls to reform the Vision Super board and management of the scheme.
“We need to look at ways to deal with this issue as a sector,” he said.