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.”
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