*** DEBUG START ***
*** DEBUG END ***

Clergy pensions: there is no free lunch

by
10 March 2010

iStock

From the Secretary and Chief Executive of the Church of England Pensions Board

Sir, — My former colleague Chris­topher Daws has suggested alter­native ways in which the clergy pensions package can be modified to make it affordable (Comment, 19 February). It is important to appre­ciate, however, that there is no free lunch here, and costs can be reduced only if benefits are reduced in some way, or gains for one group of clergy are matched by losses from others.

As he acknowledges, the proposal that younger clergy might earn more pension each year than older ones would almost certainly fall foul of age-discrimination legislation. A successful claim against such an arrangement would financially cripple the scheme. There is also the question whether it would be “fair” for two clergy to be earning different rates of pension for the same period of service just because their ages were different at the time.

He makes two other alternative proposals. The first is that the pension should be a lower proportion of the current year’s stipend rather than two-thirds of the previous year’s figure. He suggests going back to the level it was in 1980, which was 63 per cent. This does reduce cost, but only because the benefits are reduced accordingly: for example, a full-service pension at 1 April 2010 of £12,870 (63 per cent of £20,430), compared with one at 1 April 2009 of £13,473 (66.6 per cent of £20,230).

His second proposal relates to abolishing pension differentials for those holding higher office. This is an issue that has been debated in the General Synod on more than one occasion, and, while this would reduce cost, the overall saving is modest (around one per cent in the contribution rate).

SHAUN FARRELL
(An adviser to the Pensions Task Group)
Church House
London SW1P 3AZ

Letters to the editor

Letters for publication should be sent to letters@churchtimes.co.uk.

Letters should be exclusive to the Church Times, and include a full postal address. Your name and address will appear alongside your letter.

The Church Times Podcast

Interviews and news analysis from the Church Times team. Listen to this week’s episode online

Welcome to the Church Times

​To explore the Church Times website fully, please sign in or subscribe.

Non-subscribers can read four articles for free each month. (You will need to register.)