UK - Charities are under growing pressure to close their final salary schemes in the face of rising fund deficits.
The sector’s main bodies – the National Council for Voluntary Organisations (NCVO) and the Charities Aid Foundation – say major supporters are becoming increasingly concerned that their donations are being used to meet pension fund deficits.
Mercer Human Resource Consulting partner Matthew Demwell said: “Charities have to think long and hard about what costs their donors are paying. What donors don’t want to see is that falling stock markets are sucking in more and more of their money that could be used on charity cases.”
NCVO spokesman James Georgalakis said: “Charities are having to look at the service they provide – which includes pension arrangements for their staff.
“The worry is that if people get the idea that their donations are providing less, it could seriously hurt these organisations.”The RSPCA director of finance and secretary of the trustees Mark Watts said the future of its £62m final salary scheme would be decided after its triennial valuation in March.
He said: “The society is extremely conscious of the potential for costs of our pension scheme going higher and higher. And it is not uncommon for our donors to look at the annual accounts.”
He added: “Our trustees are elected by membership and our supporters. So if the supporters are concerned they have an easy route to channel these concerns. I can see the trustees wanting to look closely at closing DB scheme to new members.”
Earlier this year, the Guide Dogs for the Blind Association was forced to close all its residential training centres after losing £20m on the stock market. The organisation is believed to be assessing the viability of its final salary pension scheme.
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