SIXTY per cent of the retired clergy who are renting homes from
the Church of England Pensions Board will face a rent increase of
£60 a year, under reforms to a scheme which, the Board argues, has
been "opaque and inconsistent" (Synod, 18 July).
Others will enjoy a similar decrease.
There are currently 1200 retired clergy and spouses living in
homes rented under the Church's Housing Assistance for the Retired
Ministry (CHARM) scheme, which was established in 1983. Over the
past few years, about 30 per cent of retiring clergy have joined
The rent is based on gross income post-retirement: it does not
exceed 30 per cent of this income (25 per cent for those who joined
before 2003). The Board says that this is seen as unfair, as it
penalises "those who make an effort to improve their financial
situation", and means that those who downsize enjoy no rent
In July last year, it consulted on a number of reforms,
including a proposal to move to the "target rent" approach similar
to those used by social-housing providers. This is based on a
"basket of indicators" including national and regional average
earnings, property values in 1999, and bedroom weightings.
In a document published last month, summarising the 275
responses to the consultation, the Board confirmed its intention to
press ahead with the reforms. All tenants who begin renting from
April next year will be charged the target rent. Existing ones will
make the transition gradually: those currently paying less than
target rent will see their rent increase by the RPI plus £60 per
year; those currently paying more will see it decrease by £60 per
It is estimated that 60 per cent of existing tenants are paying
less than targeted rent. It could take up to 30 years before target
rents are reached across the board.
Under other changes, clergy will be able to reserve a house five
years before retirement. Currently, retiring clergy find a house,
and the Board, if possible, buys it. Under the revised scheme, the
Board would build a portfolio of properties, from which clergy
would be able to choose.
The consultation-response document reports that three-quarters
of respondents supported the use of target rents for new tenants,
but less than half of existing tenants supported the proposal to
transfer them to these rents. Concerns were expressed about those
living in high-cost areas and those who suffered a loss of income,
especially those who were widowed.
In response, the Pensions Board has said that those who suffered
a loss of income, who started renting before 31 March next year,
will be guaranteed a rent reduction. This guarantee will remain in
place for as long as the tenant is in the CHARM scheme.
In its response to the consultation, the Retired Clergy
Association called for "complete transparency" about how target
rents would be calculated. On Tuesday, a spokesperson for the Board
said: "We will be writing to all our tenants over the next few
weeksto tell them what their individual rents will be on the new
basis,and how these have been calculated."
Last week, the Bishop of Manchester's officer for retired
clergy, the Ven. Alan Wolstencroft, highlighted concerns about
whether the target-rent system would limit tenants' ability to move
to a different, more expensive, part of the country, perhaps after
the death of a spouse.
A spokesperson for the Board said: "The new target rent will not
make it harder for our tenants to move. We have tried-and-tested
arrangements in place to deal with exactly these situations, and
they will continue. As is the case now, some areas of the country
will still be too expensive for the Board to afford to buy a
Mr Wolstencroft also spoke of "great concern that the Pensions
Board are trying to outsource the whole of the housing programme,
taking it away from any church pastoral insight".
The Board's spokesperson said that it had "no plans to outsource
the work it does in providing retirement homes for the clergy. . .
This is not a cost-cutting exercise, but is designed to make the
best and most sustainable use of the moneys paid by the clergy
themselves in rent, by the Church centrally, and by the Board."
Pensions Bord celebrates a year of good
THE Church of England's Pensions Board has hailed 2013
as a "very good" year, as its investments outperformed their target
once again, writes Tim Wyatt.
Its annual report, which was published on Monday, said
that the Board holds funds worth £1.5 billion, and achieved an
18.6-per-cent return on their assets last year, beating their
benchmark figure by one per cent.
Over five years, the fund has grown 11.2 per cent, and
over ten years it has achieved a 7.1 per cent return. The report
states: "2013 was a year of very good returns for equities, with
only emerging markets posting a disappointing
The Board's chairman, Dr Jonathan Spencer, said that the
deficit on the Church's pension scheme rose only slightly to £293
million, and was on track to be eliminated within ten
Last year, the Board provided pensions to 10,118 retired
clergy, 2518 former employees of cathedrals, dioceses and other
church agencies, and 533 workers with the National Church
Institutions. Last year, the number of retired clergy being
assisted stood at 9917.
Of the Board's main raft of funds, its "return seeking
pool", 85 per cent is invested in stocks of companies both in the
UK and abroad, and a further eight per cent in property. Its
second, smaller, pool of funds, the "liability matching pool", is
solely invested in bonds - 23 per cent of which were corporate, and
the rest in government bonds.
The Board reported that it continues to follow the
guidance of the Church's Ethical Investment Advisory Group and
restricts investment in companies involved in military products,
firearms, tobacco, pornography, gambling, alcohol, high-interest
lending, and human cloning.
It was also an active shareholder, voting at more than
2000 company meetings, rejecting 70 per cent of remuneration
reports at AGMs, and holding 42 meetings with companies on ethical
or governance issues.
The Church Housing Assistance for the Retired Ministry
(CHARM) scheme, which is proposed to be radically changed (see
above), last year rented 1200 properties to retired clergy.
The Board also shared ownership of a further 120 homes with
retirees, and housed 250 former ministers in its seven retirement
About 70 workers at these retirement homes are currently
paid less than the Living Wage, despite a General Synod motion from
2012 calling on National Church Institutions to pay staff the Wage,
currently set at £7.65 an hour outside London. The Synod was told
at its meeting last month, however, that these workers' pay would
be gradually lifted up to the Living Wage, starting in April next
Another potential problem for the Board is a fall in
donations. The report states that the Board would not be able to
meet all of its commitments without topping up its income with
donations, so it will be a concern that they have fallen from
£653,000 in 2012 to £560,000 last year - a drop of 14 per