From the Chairman of the Church of England Pensions Board
Sir, — I am most grateful to Bill Bowder and the Church Times (News, 6 November) for drawing attention to my rebuttal of the misleading and misconceived allegations made in the Financial Times that the clergy pension scheme was facing serious shortfalls and is under review simply because of the investment strategy adopted by the Pensions Board.
In fact, the consultation took place as a result of a range of factors, key among which was the fall in general share prices of around 30 per cent during 2008, increased longevity of clergy (for which we should not be unthankful), and the fall in yields on government securities which are used to calculate pension-fund liabilities.
I do need to point out, however, that the Church Commissioners’ responsibilities in the area of clergy pensions are restricted to paying for pension benefits earned up to the end of 1997, when the new funded scheme was created. This continues to be their single largest item of expenditure.
The reported shortfall relates only to the post-1997 scheme, which is not the responsibility of the Commissioners; and current contributions to the scheme already include an element designed to eliminate part of that deficit over a 15-year period.
The recent consultation canvassed options for dealing with the larger deficit that is now apparent, as well as the ongoing cost of the scheme. The overriding aim, in carrying out the review, is to confront the undoubted challenges facing the scheme, but to ensure that clergy continue to receive an adequate income in retirement at a cost that is affordable.
Church of England Pensions Board
Great Smith Street
London SW1P 3AZ