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Board admits pensions likely to prove costly

02 August 2013

SHUTTERSTOCK

THE Church of England Pensions Board has reported that its funds performed well in 2012, but conceded that providing pensions and housing to future retired clergy would be a challenge.

The Board, which manages more than £1.3 billion-worth of assets, and provides pensions for 8612 retired clergy, published its annual report and accounts for 2012 on Wednesday.

The Board manages two "investment pools": a "Return Seeking Pool", which generated a 10.6-per-cent return on investments during 2012, outperforming its benchmarks for the past one, three, and five years; and a "Liability Matching" pool, which matched its benchmark during 2012, but outperformed it over the past three, five, and ten years.

Church House said that the Board had carried out a valuation of the Clergy Pensions Scheme "to make sure that it stays on course to provide the promised benefits over the next 50 years or more". As a result of the valuation, dioceses had been asked to increase the proportion of clergy stipends which they contribute to the scheme from 38.2 per cent to 39.9 per cent, with effect from 1 January 2015. Clergy do not contribute to the scheme, and there are no plans to change the pension benefits they receive, in contrast to the last valuation in 2009.

The report says that investment income of £1.4 million generated by the Board's charitable funds was "not sufficient to cover the services we provide". Without gifts, donations, and legacies, it would "not be able to offer the level of services currently provided".

During 2012, the Board commissioned research into the future housing needs of retired clergy, which suggested that about one third of retiring clergy would need help with housing. The Board has also launched a consultation on the CHARM rental scheme, whereby the Board buys properties that are let to retired clergy.

Read the full report here.

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