KENNET District Council is set to ask the Government for permission to take £4million out of its capital reserves to plug a shortfall in its pension fund.

The council has a deficit of £5.9million in its pension fund and believes that paying a lump sum plus its normal annual revenue contributions should eliminate the deficit over time without the need for additional lump sums.

Frank Marshall, Kennet's director of resources, said the reason for the deficit was greater longevity and reduced returns on the money invested in stock market portfolios.

The pension fund is administered by Wiltshire County Council and Kennet and other local councils in Wiltshire pay into the countywide pension fund.

The county council employs investment managers who invest money and monitor the investments' performance.

Kennet has 461 permanent employees and around 300 in the pension scheme. Mr Marshall said the deficit in the fund will not affect members as pension benefits are guaranteed.

Kennet's resources executive committee will be asked at its meeting on February 1 to give Mr Marshall authority to seek permission from the Government to use money from the capital reserves and, if agreed, this would be done on March 31 this year.

In March last year Kennet paid a lump sum of £6.3million from its capital reserves into the pension fund.

Kennet's capital reserves amount to £34million.