Pension reactions
George Austin looks again at current developments
in clergy pensions and the reactions to his earlier
comments upon the changes that are being planned
N
ew Directions articles do not, as affecting the pension requirements’. it not change the position of any CHarM
i find, produce much response, still seems to me to be what i described users. Their relationship is, and will
save from the occasional as a ‘simple mathematical equation’. and always be, with the Pensions Board and
aggrieved bishop – even though many ask those clergy and parishes now find- not the third party purchaser’. That is as
bishops would claim not to read such a ing that they must share a priest – some- it should be – but is it as it really seems
decadent journal. Not so when i wrote times with ten other parishes – if this has to be to the pensioner? and it is certainly
about the new pension proposals. a sim- not also had a deleterious effect on parish here that problems have been raised in
ilar piece for the retired Clergy associa- life and the pastoral ministry. letters that i have received.
tion newsletter even gained a response one problem that the elderly must face
from the Secretary and Chief Executive CHARM scheme is growing incapacity. to meet this, my
of the Pensions Board itself. also clarified was the fact that differen- wife and i have decided to move nearer
in it he clarified some of the issues tials still apply with the CHarM scheme, to our son in London so that we are 20
which had caused some anxiety – as i had so that clergy who retire to the more minutes away rather than 200 miles. But
hoped. for those already pensionable, it expensive counties of south-east Eng- we are fortunate in that we own our own
is a relief to know that ‘pensions in pay- land have an increased purchase limit of house, and if the house we are selling
ment and all pension benefits earned up £225,000. This was always the intention decreases in value, so too does the apart-
to the point of change (1 January 2008) of the original discussions of the commit- ment we will hope to buy.
will continue to increase annually in line
with rPi up to 5%.’ This is a legal require- Privatization
ment and ‘it is only benefits earned after it is perfectly But as one correspondent points out,
the date of change that will be subject to ‘those of us in the scheme are trapped in
the lower 3.5% cap’. The same is true of
understandable that the
our retirement accommodation. Should
all pensions at the point at which they
first duty of a private
we need to move there is no way we
first come into payment, so that ‘they will can afford to do so because according
be continue to be based on the National
institution is to its
to the terms of the scheme we have to
Minimum Stipend fixed by the archbish- sell up and start from scratch’. for him,
ops’ Council and the Central Stipends shareholders this would mean trying to service a loan
authority’. of something like £130,000 in order to
move to a similar property, instead of on
Added strain tee on which i served in the 1970s that the £50,000 mortgage he took out when
He does however misunderstand the produced the report on Housing for the he retired seven years ago.
point i made about the ‘additional strain retired Clergy. it is perhaps an indication in his case, he adds, ‘the Commission-
put on the pensions fund by clergy enter- of the different world in those days that in ers’ investment of £49,000 is now worth
ing the ministry at a later age’. it is cer- November 1972 an announcement was something like £120,000’. He adds, very
tainly the case, as i suggested, that in the made to the General Synod that the Pen- reasonably, that ‘surely they could see their
Eighties younger candidates ‘were dis- sions Board were about to increase the way to allowing one move in the course
couraged from entering the ministry on mortgage amount from 80% of the value of a long retirement to properties of a
the grounds that they needed more expe- of the property to a maximum of £3,500, similar value without applying monthly
rience of life’. Let me explain the problem, to 90% with a maximum loan of £7,500 at interest payments which are frankly more
using notional figures: if in 1968 there an interest rate of 8%. it seems that house than could possibly be met. They would
were, say, 500 ordinations of whom 400 prices are slightly higher today! not have to find new money. The current
were in their mid-20s, then in 2008 those returning to 2008, the secretary of the value of their loan would simply be trans-
400 would be eligible for a full pension. if Pensions Board also revealed the curi- ferred to a different property.’
in 1988 there were again 500 ordinations ous fact that ‘the economic interest in
of whom 400 were in their mid-40s, those the loans granted to the Pensions fund Two masters
would also – together with the 400 from to fund the CHarM mortgage scheme’ Very reasonable, yes – if the loans were
1968 – be able to retire on a pension. which has been sold to a private com- still the property of the Church Commis-
This would of course be a half pen- pany ‘covers loans granted to the Board sioners who would be dealing with the
sion rather than a full one, but it would over the period 1983–2004 only’. why matter as a charitable institution using
mean that the Pensions Board would in only that period? of course it could be their own money to meet the pastoral
effect be paying the equivalent of 600 because of a very forward-looking finan- needs of the clergy. But the CHarM
full pensions. as i said in my article, cial decision in expectation of the present scheme has now been privatized and it
‘some of us then tried to point out that fall in the value of houses, some proph- is perfectly understandable that the first
with many more older candidates, these esying a drop of as much as 30%, making duty of a private institution is to its share-
would reach retirement at the same time it a considerable loss but one now not at holders. The private company cannot
as clergy already then approaching 50, the expense of the Commissioners. But be blamed if those pastoral needs are no
putting a strain on clergy numbers as well he then goes on to say that this sale ‘does longer the first priority, however much the
May 2008
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newdirections
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