UK - Charities are seeking financial help from the government in a bid to shore-up pension scheme deficits.
The Charity Finance Directors’ Group will be writing to the government next month in a bid to secure special grants for charities that operate occupational or stakeholder schemes.
The move comes as a large number of charities struggle to make up the shortfalls created following market falls and increased longevity because they do not have the resources, like normal companies, to put in additional funds.
Many charities have been forced to use donations from the public to plug their scheme deficits. CFDC, which specialises in helping charities manage their taxation and accounts, wants the government to “recognise the cost of pension provision through grants to charities”.
Chief executive Shirley Scott will also be asking the government to relax its rules on declaring the FRS17 deficit in charity-run schemes because they are “scaring off donations from those who do not fully understand the measure”.
Barnardo’s Pension Scheme manager Graham Brown (pictured) agreed there was a “major problem”.
He said: “Whereas some large FTSE100 companies have gone to their shareholders for additional funds to help cover a pension scheme deficit, charities have nowhere to go.
“We are extremely concerned that potential or current donors may be put off because they see their donations going straight to the pension scheme instead of the services of the charity.”
Brown said the loss of advanced corporation tax credits, which affected not only the pension scheme’s investments but also those of the charity, had produced a “double-whammy” effect.
“The government will have to make up its mind very quickly whether they wish to see a flourishing voluntary sector that takes on a great deal of work from both national and local government, or a quickly diminishing sector as recruitment and retention becomes nigh on impossible.”
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers