UK - Charities are closing their pension schemes in a bid to ease their financial burdens, the Charity Fund Partnership claims.
Less than a third of charities have retained their own pension scheme after a turbulent year in the equities market, the specialist research organisation’s 2003 Survey of Charitable, Educational, Endowment and other Funds shows.
Managing director Kevin Sims said charities were finding it more difficult to retain their pension plans because any increase in funding would have to be taken from donations.
He said this predicament was likely to cause a trend away from in-house pensions arrangements towards “industry-wide” schemes or – as a worst case scenario – a “complete isolation from any pensions arrangement other than stakeholder”.
Last September it was revealed that charities were under pressure to close their final salary schemes after a backlash from donors who felt their contributions were being used to plug pension deficits rather than go to good causes.
The Charity Fund Partnership survey found that in addition to the 31% of charities which have retained their schemes, nearly a quarter are now part of industry-wide schemes, such as those run by The Pensions Trust, USS or SAUL.
A further 27% do not provide any pensions arrangements but are prepared to contribute to staff personal pensions while 12% of charities do not contribute to any pensions arrangements for their employers. The remainder of charities did not respond to this part of the survey.
The Pensions Trust chief executive Richard Stroud confirmed that membership for its industry-wide schemes grew by around 9% last year.
He added that charities which are part of a multi-employer scheme are able to avoid the FRS17 liabilities of their pension schemes – taking pressure off the organisation for its annual accounts.
“In a multi-employer scheme all the assets and liabilities are merged, so you can’t identify any assets and liabilities for any employer.”
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