Anne-Marie Winton comments in NatWest Content Live on pensions reform in the charity sector
Poor fund returns and the closure of defined benefit schemes are driving reform of pensions in the charity sector.
Defined benefit schemes need to pay out to current retirees as well as setting aside money for those who are enrolled in the scheme but have not yet retired.
An ageing population, combined with stagnant investment returns, meant the guarantee offered by the schemes became unaffordable. This has led many charities, as well as private and public companies, to shut their defined benefit pension schemes to new entrants.
Staying on the right side of The Pensions Regulator (TPR) should be the priority for charity directors and board members.
“Those charities which are being run well, pension deficit or not, have little to fear from TPR, but they do have to keep an eye on their pension fund.
“Remember, a successful investment strategy can help to bring down a deficit. So they need to explain what the fund is doing and how it can improve its performance if possible.”
Anne-Marie pointed out that good communication benefits the reputation of the charity. Reputation needs to be handled well if the charity is to be considered a going concern and worthy of donations from members of the public, or being awarded grants.
Read Anne-Marie’s comments in NatWest Content Live
The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. Arc Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.