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Report queries clergy pensions

30 November 2012

A SPOKESMAN for the Archbishops' Council has defended the state of the Clergy Pension Scheme, after a pensions consultant said that its deficit would put a burden on congregations.

John Ralfe, an independent pensions specialist, told The Financial Times on Saturday that the C of E pensions deficit could reach £500 million by the end of this year. He said that congregations would have to find £108 million a year if the current plan to eliminate the deficit over 12 years was not extended.

A spokesman said in response to the FT story: "We do indeed expect a deficit, but this is inevitable given the current financial climate and low level of gilt yields. But we are a relatively young scheme, and time is on our side.

"In light of the flexibility afforded all pension schemes by the Pensions Regulator, the Board is currently actively considering its approach to the triennial valuation. Our investments are showing a good return, and we do have options for more radical change to the scheme should we need them in the future."

The performance of the Clergy Pension Scheme would continue to be monitored "to ensure both security in old age for those who so selflessly serve the Church and a scheme that can be afforded by the Church at large".

An update from the Archbishops' Pensions Task Group, given to the General Synod last week, said: "The Pensions Board has done some early thinking with the support of the scheme actuary on how any increased pension deficit might best be managed. Barring further substantial deterioration, initial indications are that a way through that avoided further changes to the current scheme could involve a combination of measures.

"They would include some changes to the financial assumptions used, an increase in the length of the recovery plan, and some increase in the contribution rate paid by dioceses. Depending on the size of the - hopefully small - increase in contributions needed, consideration might need to be given, on affordability grounds, to some stipend restraint."

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