Almost £11.4m has been wiped from seven council pension funds in the alleged $50bn fraud by an American trader.
Pension funds at Hampshire CC, Dorset CC, Knowsley MBC, St Helens MBC, Sefton MBC, Liverpool City Council and Wirral MBC have all been hit after Wall Street trader Bernard Madoff allegedly defrauded his investors to the tune of £33.5bn.
Hampshire CC’s fund stands to lose the most, at £7.1m. The council said the sum represented just 0.3% of its pension fund’s total assets of £2.4bn, and there was no risk to any contributors.
In the last year, £700m was wiped off the council’s pension fund due to the global financial crisis.
Dorset County Pension Fund is set to lose £2.3m. Dorset’s Investment Committee chairman, Captain John Lofts, said: ‘Dorset’s exposure is extremely small relative to other investors and represents only 0.2% of the Dorset’s Pension Fund’s total investments.’
Merseyside Pension Fund, which has money invested from five northern councils, is set to lose £2m.
Chairman of the LGA, Cllr Margaret Eaton, said: ‘We are still investigating the extent of councils’ exposure to these investments, which seems likely to be limited to some councils’ pension funds.
Councils will be confident that this won’t have an impact either on council tax or on local services.’
The Royal Bank of Scotland stands to lose £400m, and HSBC warned its shareholders that its losses could be £675m.
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