Public sector pensions have been put in the spot-light this week, as part of a major overhaul in the way people save for their retirement.

Lord Hutton is expected to suggest new measures to help make savings in public sector pensions, including increasing the age of retirement, and abolishing final salary pensions.

Figures obtained by the Watford Observer from local councils, show the amount of taxpayers' money contributed into staff pensions has increased by hundreds of thousands of pounds over the past five years.

Local authorities in south west Hertfordshire contribute millions of pounds into pension schemes for their staff, under the Hertfordshire Local Government Pensions Scheme.

The scheme is administered by Hertfordshire County Council and regulated by the government. As well as contributions from employees, the council also has to contribute to the scheme.

An independent review suggested today that using average career earnings, calculated over the course of a person's career, would be better value for money.

Contributions from Three Rivers District Council increased from £1.3 million in 2005, to £1.5 million in 2007, but then stalled at about £1.2 million in 2008.

This year the district council has increased this figure to £1.5 million, the same level it budgeted in 2007.

Kevin Snow, spokesman for the district council, said this was a national scheme, and that the average staff salary in Three Rivers was significantly below the national average.

In Hertsmere, the borough council has contributed an increasing amount of money to the scheme, from £1.75 million in 2005, to an estimated £2.265 million this year.

Catherine Feast, spokesman for Hertsmere Borough Council, said: “In line with other local authorities, the cost of pensions has been increasing.

“The expected costs of providing pensions is calculated regularly by professional external actuaries.

“The cost of funding a pension scheme takes into account a variety of factors - including how much interest our assets are predicted to generate, against assumptions around how long people will live and therefore be drawing their pensions for, along with other things like inflation.”

Watford Borough Council's contributions have followed the same pattern, rising from £2.5 million in 2005 to £2.9million for this year.

The average pension under the Local Government Pension Scheme scheme is £4,235 a year, and employee contributions average 6.3 per cent a year.

The contributions range between 5.5 per cent of salary for the lowest paid, those earning up to £12,600 a year, up to 7.5 per cent for other staff.

An average employee contribution to a defined benefit pension schemes in the private sector in 2008 was 4.9 percent.

Council contributions breakdown:

Three Rivers.

  • 2005/06 - £1,316,683.
  • 2006/07 - £1,433,350.
  • 2007/08 - £1,515,362.
  • 2008/09 - £1,173,760.
  • 2009/10 - 1,298,142.
  • 2010/11 (11 months) – £1,228,010.
  • 2011/12 - £1500406.

Hertsmere.

  • 2005/06 - £1,750,913.
  • 2006/07 - £1,749,694.
  • 2007/08 - £1,845,388.
  • 2008/09 - £1,807,083.
  • 2009/10 - £1,928,036.
  • 2010/11 - £2,245,714.
  • 2011/12 - £2,265,000.

Watford Borough Council.

  • 2005/06 - £2,575,332.79.
  • 2006/07 - £2,867,989.50.
  • 2007/08 - £2,882,491.09.
  • 2008/09 - £2,812,090.94.
  • 2009/10 - £2,889,172.05.
  • 2010/11 - £2,948,282.51.
  • 2011/12 - £2,948,000.