THE SYNOD has held on to a defined-benefits pension scheme for the clergy, but with changes to make it more affordable to the Church.
In a long debate on Tuesday morning, the Synod sifted through the recommended changes to the clergy pensions. Government requirements for an increased safety net, together with demographic changes, meant that, unchanged, the cost of clergy pensions would rise above a level that most dioceses could pay.
The new proposals include requiring 40 rather than 37 years’ service of the clergy to be eligible for a full pension; breaking the link between stipend rises and pension rises; and reducing the limit on price indexation in the funded scheme from five per cent to 3.5 per cent p.a. in relation to future service; and created a £4.4-million fund for transition. The full recommendations are in the report The Future of Clergy Pensions.
The Bishop of Ripon & Leeds, the Rt Revd John Packer, told Synod that unless action was taken immediately to modify the benefits of the scheme, the new contribution rate would put dioceses under further financial pressure that few could sustain.
Until December 2006, the rate was 33.8 per cent or £6105 per stipendiary cleric. From April 2008, it was likely to be around 43.5 per cent or £7856 — an additional £1750 per stpendiary cleric. An extensive consultation with the dioceses made it clear that this was unsustainable, and the proposal was to keep the net cost below four per cent.
The Bishop believed that the package struck a fair balance of security for the clergy and the need for affordability in the Church. The impact of the proposed change would be set out in the consultation, and members would have 60 days to respond.
The secretary and chief executive of the Church of England Pensions Board, Shaun Farrell, gave the Synod a presentation on the current and proposed pension scheme. The average retirement income in the UK was £13,520 p.a. from all sources. Only 62 per cent of retired people received a pension from previous employers, leaving 40 per cent relying entirely on the state pension. Only 11 per cent of the working population outside the public sector was part of schemes such as that available to clergy.
Figures for 2005 in the C of E showed full-service pension at £11,686 p.a., and state pension at £4132: a total of £15,818. It put clergy in the top 20 per cent of retirement incomes, but there was a need to provide housing. Three options had been given to the dioceses, and they had opted to retain the defined-benefit scheme, but to modify it. They had not wanted to see clergy exposed to risk. The move from a 37- to 40-year accrual period for a full pension did not mean that all clergy would have to work another three years; and they could still retire at 65. Retirement age would have needed to move to 66.5 years to enable the stipend link to be maintained, or 68.5 years to allow the above and to compensate for loss of £4.4 million saving.
There had been a seven-fold improvement in longevity. On durability, all defined-benefit schemes were open-ended; so the funding risk remained with the employer. But new scheme-funding regulations required trustees to adopt a “prudent” approach at all times.
IN THE DEBATE on the draft Dioceses, Pastoral and Mission Measure, Synod members concentrated on the section dealing with Bishops’ mission orders, and praised the Fresh Expressions movement. This was the subject of a presentation to Synod at the end of the day.
Introducing the final-approval debate, the Bishop of Exeter, the Rt Revd Michael Langrish, said that the Measure derived directly from the Toyne report and indirectly from the report Mission-Shaped Church, which the Synod debated in 2004.
The Measure was inevitably long and detailed, because it dealt with provision for a new and more effective Dioceses Commission, major amendments to the Pastoral Measure, “with simpler, more flexible and decentralised provisions for everything from pastoral re-organisation to the changing use of church buildings, as well as a wholly new set of provisions for mission initiatives and a new one-stop shop for the care of churches”.
The vision behind it was of a more flexible and effective stewardship of both ministry and buildings, and the facilitating of fresh expressions of church. “At the same time, there was a clear view that these things should happen within a very clear Anglican ecclesiological understanding.”
The aim was to loosen up the Church’s legal structures, and to enable a “mixed-economy” Church. Mission initiatives would be subject not only to the provisions of the Measure, but also to a statutory Code of Practice to be issued by the House of Bishops and laid before the Synod before the Measure came into effect.
A number of final amendments were carried without debate and the voting on the final — approval motion was almost unanimously in favour: Bishops 22-0; Clergy 104-1; Laity 123-0. The Measure now stands committed to the legislative committee.