UK - A pensions "crisis" in the charity sector is making it increasingly difficult for organisations to recruit and retain staff, a new report reveals.
The Charity Pensions Maze Report, published by the Charity Finance Directors’ Group, surveyed 115 organisations operating 179 schemes with total assets in excess of £930m.
It found that 48% of charities with defined benefit schemes had closed them to new members, with a quarter “likely” or “very likely” to be closed within the next three years.
Only 21% of respondents offered a defined contribution scheme and take-up was low. The average number of active members in stakeholder schemes among all respondents was just 39.
A CFDG spokeswoman said competition for staff was fierce, with the public sector often coming out on top if pension benefits could not be matched.
She said: “Nurses and home helps are core workers for charities but many, understandably, do not want to give up their public sector pension – the best perk of the job.
“Charities cannot turn to the taxpayer or shareholders to fund any deficits. If money is going straight into the pension scheme, people may be reluctant to donate in the future.”
CFDG blamed charities for taking a “head in the sand approach” and warned that improved stock market performance would not solve the problem, with longevity and rising costs a “real risk issue”.
The £181m Barnardo’s Staff Pension Scheme was singled out as representative of the problems facing charities, and praised for actively managing its liabilities.
In 2003 Barnardo’s revealed a deficit of £67m, compared to a surplus of £18m in 2000, and offered its 2300 employees a range of options.
Pensions minister Malcolm Wicks (pictured), who backed the report, said changes in pension valuations were particularly difficult issues for charities, and conflicts of interest between beneficiaries, staff and donors needed to be balanced.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.