The Goldfields Library Corporation, which manages libraries in Bendigo, Castlemaine, Gisborne, Kyneton, Pyramid Hill, Romsey and Woodend, will have to find $700,000 to cover its share of a shortfall in the Local Authorities defined benefits scheme.
The superannuation scheme provides those who joined councils between 1947 and 1993 with a fixed super return on retirement, no matter how bad the investment returns are.
Any shortfall between what is owed and what the investments returned is paid by the council they were employed with.
The City of Greater Bendigo must find $10.3 million by the end of the financial year.
Instead of finding the money, Bendigo has vowed to fight the rules of the fund which requires it to be fully funded.
Being fully funded means there must be enough money available in case every employee retires at the same time, an unlikely event.
City of Greater Bendigo mayor Alec Sandner said enough is enough.
“It is absurd that councils and libraries are forced to regularly top up this fund when other levels of government are happily operating under different rules,” he said.
Council wrote to relevant state and federal members in July
asking them to change the rules so, like state and federal schemes, it doesn’t have to be fully funded.
“We have received polite responses acknowledging receipt of our letters and that is nice, but what is really needed here is some decisive action,” Cr Sandner said.
“Councils help fund our libraries in the hope the money is spent on books, computers and other library services.
”We fully understand there are staff costs associated with this, but this particular superannuation impost is unfair and means there is less money to spend on improving library services.”
Federal Supperannuation Minister Bill Shorten offered little relief for council.
“Superannuation is a fundamental workplace entitlement, and workers have a right to know that their hard won retirement incomes are secure,” his spokesman told the Bendigo Weekly.
“The Local Authorities Superannuation Fund is an APRA‑regulated fund, with both accumulation and defined benefit members.
“As a regulated fund, it is required to comply with the requirements of the Superannuation Industry (Supervision) legislation which sets out funding and solvency requirements for these funds.”
Victorian Local Government Minister Jeanette Powell said it was a federal issue
“Any legislative change regarding the requirement that the scheme meet its unfunded liability would need to be made by the Federal Parliament,” she said.“The Victorian Government will continue to provide advice on how municipal councils can meet their obligations under the defined benefits scheme.”