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Clergy pensions warning

28 March 2013

THE clergy-pension scheme's deficit is likely to have increased since 2009, the chairman of the Church of England Pensions Board, Dr Jonathan Spencer, said last week. It was "likely" that higher contributions would be needed from dioceses.

In an open letter, published on the C of E website on Tuesday of last week, Dr Spencer said that the scheme was being valued "as at 31 December 2012", having last been valued "at 31 December 2009".

Dr Spencer explained that a valuation was "a progress report on how the scheme is doing, and it is used to make sure that it stays on course to provide the promised benefits over the next 50 years or more".

He continued: "Despite the Pension Board's assets having performed well, wider movements in financial markets mean that the deficit will have increased since the last valuation in 2009." Nevertheless, it was "too early to have an accurate figure" as to how much it had increased by.

"We expect to know more in early summer, when we will also be able to start looking at a range of assumptions which affect the level of diocesan contributions and the time period over which the deficit should be paid off. Various options will be considered if - as is likely - somewhat higher diocesan contributions are needed."

The amount clergy received in their individual pensions was "a matter for Synod", not the Pensions Board, which "is responsible for administering the clergy pension scheme rather than deciding the nature of the benefits to be provided . . . But we have already said that we are not expecting there to be a need for any changes to the benefits provided under the scheme."

Dr Spencer said that it was "too soon to tell" whether the Government's plans to replace the second state pension with a higher main state pension, after 2017, "will be beneficial or not for clergy. . . The time to address these issues will in practice be around the time of the 2015 valuation of the clergy scheme, by which time the details of the state pension changes should be settled."

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