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C of E Pensions fund enters choppy waters

02 August 2019

The Board has reported a bad year for its investments, with a total loss of 2.6 per cent


Turbulent times: a screen showing prices on the London Stock Exchange turns red as the FTSE 100 Index crashes on opening by more than 230 points to 7,104.94, as inflation fears continued to rock global market prices, in February, 2018

Turbulent times: a screen showing prices on the London Stock Exchange turns red as the FTSE 100 Index crashes on opening by more than 230 points to 7,...

THE Church of England Pensions Board has reported a bad year for its investments: there has been a total loss of 2.6 per cent on its £2.5 billion-strong portfolio.

The Board, which provides pensions, housing, and other retirement services for tens of thousands of retired priests and lay Church employees, was affected by a global fall in financial markets in 2018, which ultimately meant that its assets fell back slightly from the £2.6 billion they were worth the previous year.

This setback was revealed in the board’s annual report, published on Wednesday, which also showed that there was a deficit of £292 million in the charity’s pension schemes.

The board’s chief investment officer, Pierre Jameson, said: “The final quarter of 2018 was a turbulent period, particularly for public equities, and the board’s results dated 31 December 2018 partly reflect this.”

The board’s asset managers were successful compared with the wider market: the FTSE 100 fell 8.7 per cent in the same timeframe, and a global index, MSCI World, lost 3.8 per cent.

Over a longer timeframe their position still looks healthy, with returns over the past 15 years averaging 7.4 per cent each year, compared with 6.6 per cent on the FTSE 100.

The longer-term strategy of the board is to continue to diversify its portfolio away from stocks and equities, the report states, and instead to invest more in infrastructure, property, and other less volatile options.

Since the turn of the year, their fortunes have improved, and, in the first six months of 2019, the investment assets controlled by the board have returned just under 12 per cent.

Ten thousand retired clergy currently benefit from the board’s pensions, and a further 3800 retired national, cathedral, diocesan, and parish C of E workers are also given some form of assistance.

The board also operates the Church’s Housing Assistance for the Retired Ministry (CHARM) scheme, which provides homes to rent for retired clergy and their dependants.

Some 2500 retired clergy households are now on the scheme, which bought 38 new properties in 2018 to increase its stock.

The board also issued a £50-million bond last year to enable it to continue to grow its portfolio of homes, which will be rented out privately until allocated to a retired priest.

CHARM previously saw the Church buy homes chosen by soon-to-retire clergy and then rent them back upon retirement, but, in 2014, it switched to building up its own pool of homes across the country, which it would own permanently and from which clergy must choose as a retirement house (News, 18 July 2014).

The new chair of the Pensions Board, Clive Mather, said in his introduction to the annual report that he was particularly proud of the organisation’s leadership in ethical investment and tackling the climate crisis in 2018.

“A major achievement was the negotiation of the first ever framework between a multi-national energy company [Shell] and their long-term investors about how the company will transition to a low-carbon economy,” he wrote.

Despite the difficulties in 2018 for the Board’s investments, Mr Mather wrote that he remained upbeat. “I take comfort in the diligence and professionalism of my colleagues, but above all in our faithful and loving God to whom we commit this vital ministry.”

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