Taking bespoke funding route could help charities reduce pension costs, report finds
Melanie May | 18 June 2021 | News
Charities could reduce their annual cash contribution to their DB pension schemes by between 35 and 65% if they pledge security to their pension scheme and choose a bespoke funding plan under the proposed new DB funding regime rather than adopting the alternative fast track option, according to analysis by Hymans Robertson.
In its annual report on DB pension funding in the charitable sector, the pensions and financial services consultancy found that charities could significantly reduce their pension cash contributions by pledging security to support a lower funding target or longer recovery plan.
The report also found that the proposed new TPR funding regime will see pension deficits for the largest 40 charities in England & Wales increase overall by a substantial £1bn to £3.5bn, as schemes are required to put in place long term funding targets.
Advertisement
Alistair Russell-Smith, Head of Corporate DB, Hymans Robertson, explained:
He added:
- Government urged to introduce measure to recognise social sector’s economic contribution (8 July 2021)
- UK adults increasingly reviewing non-essential spending (13 September 2021)
- UK social impact investment market reaches record £6.4 billion in pandemic year (14 October 2021)
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.