A PENSION scheme for hundreds of council employees in Kent has a deficit of £941million, thought to be one of the largest in the country.

Councils belonging to the scheme are now facing the prospect of increasing their contributions to the scheme, in some cases by more than nine per cent.

Fund managers say that while they are concerned at the size of the deficit, pension scheme members should not be alarmed.

Employee contributions – around six per cent - cannot be increased under the scheme’s regulations, although the Government is coming under pressure to change that rule.

The scheme has more than 32,500 members from all local authorities in Kent, including 20,238 from Kent County Council and more than 2,000 from the Kent Police Authority.

The size of the deficit has grown from £519million in 2001 and theoretically means that the funding level – assets as a proportion of liabilities - has dropped from 76 per cent to 63 per cent.

Several factors have contributed to the spiralling deficit. They include weak returns from stock markets and the fact that people are now living longer. Kent, like other local authority schemes, also took a “pension holiday” in the 1990s when it did not make a full contribution.

More recently, around £5billion was lost to the Chancellor who increased the Government’s take from corporation tax.

Cllr James Scholes (Con), the chairman of the Kent Superannuation Fund committee, said: “On a big fund like ours, the size of the deficit will always be larger. We have had a better period than some authorities have and it will not cause difficulties in the short term because we have more money coming in than going out.”

“[But] we do need to close the deficit and have put in place actions to do that. The payments from councils as contributors will have to increase – that may cause them other problems in their budgets,” he said.

In Kent County Council’s case, its contribution to the scheme will have to increase by close to £9million or 3.7 per cent over the next three years.

Cllr Nick Chard (Con), cabinet finance member, said: “It will be an extra cost but we have made provision for it and were expecting it.”

Dover District Council is facing the biggest hike in its contribution, which will have to increase by 9.6 per cent, or about £830,000.

Other councils facing increased contributions are Swale (9.4 per cent), Thanet (eight per cent) and Tonbridge and Malling (7.7 per cent).