A pension fund for thousands of council workers in Monmouthshire and Torfaen is one of the worst in the country, new figures show.

Now one of the fund managers of the Greater Gwent pension fund - led by Torfaen county borough council - has been sacked, after it slipped into the bottom 10% of local authority pension funds.

Councillor David Waring, leader of Monmouthshire county council, said: "The fund is in the bottom 10% nationally and this is a serious situation - the fund is under-achieving."

Councillor Brian Hood, raised the pension crisis issue at a Monmouthshire council meeting, due to concern for the thousands of council workers - excluding teachers - who were paying into the pension fund.

He said: "The fund has under-performed despite it getting into the top half of the league tables in 2000.

"To be in the bottom 10% is due to bad management."

But he added: "I am aware that action has been and is being taken to correct this."

Phillip Nash, director of finance at Torfaen council, confirmed the pension plan was not doing well.

"Torfaen council, as administrating authority to the Greater Gwent fund, has recognised that the fund has under-performed," he said.

"We recently terminated a long standing arrangement with one of our pension fund managers because of this.

"As a consequence, the council has thoroughly and robustly reviewed al aspects of the pension fund."

The review included how the investments were structured, allocation of assets, pension fund management, and how the arrangements were being administered.

Mr Nash said that, as a result of the review, new arrangements for the pension fund were put in place from April 1. He said: "We have reported regularly to stakeholders within the fund as the investment review has progressed."

Mr Nash said that although comparing the performance of local authority pension funds was of value, the most important thing for council workers was the ability of the fund to ensure positive investment returns and capital growth.

Mr Nash added: "Confidence levels within the global economy have been a major factor affecting not only the Greater Gwent's pension fund performance but virtually all pension funds within the UK."