Dorset County Council's pension funds are safe

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Dorset County Council has given assurances that there is ‘no risk’  to Dorset’s pension pot despite its £2million investment with the American fraudster, Bernard Madoff. The pledge follows yesterday’s conviction in the USA of the Wall Street fund manager. 

He pleaded guilty to all 11 charges surrounding a £35billion ($55bn) "ponzi scheme" fraud in which he swindled clients out of billions of dollars by running an investment scheme masquerading as a $50billion investment empire.

The authority admits its Pension Fund had £2million invested in the Kingate Global Fund, part of Madoff’s portfolio. Despite the potential losses the council’s investment committee chairman, councillor John Lofts, stressed that there was ‘no risk’ to the fund’s 24,000 contributors or 12,000 pensioners. Councillor Lofts said: “The fraud involved £33.5billion of investors’ money. Dorset’s exposure is extremely small relative to other investors and represents only 0.2 per cent of the Dorset’s Pension Fund’s total investments. We are still concerned that a small proportion of investments may be at risk because of this fraud.”

The investment was made on behalf of the pension fund by Pioneer – one of three hedge fund managers employed by the fund.

Madoff has been under house arrest in his luxury Manhattan penthouse since he was charged with fraud in early December last year.

This latest setback comes after the disclosure that in November, £7.8million was lost from Dorset’s pension fund when property prices plunged and a previous investment was valued at zero