The £106m Church of England pension scheme is facing a £12m shortfall and has asked its congregations to increase donations to support the fund.
The Church said that apart from the recent downturn in the stock markets the shortfall is because the life-span of retired clergy is increasing – according to a Church spokesman they are living on average ten years longer than those outside the Church. The spokesman also highlighted a dramatic 50pc increase in the number of stipendiary clergy who have been ordained in the last five years. He added: “Pension benefits increase as stipends increase and they have risen at a higher level than expected.”
Currently 1500 of the Church of England’s 10,000 clergy members belong to the MSF union who are pushing for the average £16,500 pa stipend to be increased to £20,000.
Dioceses currently donate £32m pa to the scheme, which was set up in January 1998. Until 1998 all clergy pensions liabilities were guaranteed by the Church Commissioners – the body charged by Parliament to look after the Church of England resources.
The Church emphasised that the current pension difficulties were not on same scale as the Church Commissioners’ losses in the 1980s, when over £800m was lost on speculative property deals. A spokesman defended the new scheme and said: “The introduction of the new pension funding arrangements was the right decision in terms of increasing the security of clergy pensions, enabling the Church Commissioners to pursue a balanced investment strategy. Had this not been done, the Church would be facing a much more difficult challenge than it is now.”
He added: “We face a stiff challenge, but it is one which is manageable.”
The shortfall means that an increase of 7.2% in the contribution rate is required to sustain current levels of benefit, from 21.9% of pensionable stipend to 29.1%. The present clergy pension is around £10,380 pa – two thirds of the minimum stipend.
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