Recognising the many difficulties charities who participate in Local Government Pension Schemes face, a series of really helpful guides have been published over the last few weeks:-
- Leading legal firm Charles Russell Speechlys has produced a really helpful LGPS Charity briefing for Charity Finance Group (CFG). The guide outlines the risks and options for charities considering joining LGPS, and the problems faced by those considering exiting. The CFG accompanying blog is here.
- Leading representative body Pension & Long term savings Association (‘PLSA’), formerly the NAPF, have launched the first two guides in a series covering charities in LGPS. These cover:
Read more »
Spence & Partners, the UK pension actuaries and administration specialists, today shared their concerns that more charities will become trapped in multi-employer pension schemes with damaging liabilities unless government amends Section 75 legislation.
In March of this year, the Department for Work and Pensions (DWP) were seeking views on the operation of the employer debt regime for non-associated multi-employer defined benefit schemes in a call for evidence which closed in May. As of yet no proposals have been made and the DWP website warns that it was published under the Coalition government and therefore might not be a priority for the current regime. Read more »
The Pensions Regulator has produced 65 pages of guidance for pension scheme trustees and sponsors on assessing and monitoring the employer covenant. We have provided some generic guidance via the attached link – TPR’s guidance on assessing and monitoring the employer covenant.
Helpfully in Appendix B and C from pages 54 onwards there is specific guidance for not for profit organisations. The key recommendation is that commercial operations and donations need to be considered independently with the guidance providing examples where donation income represents a low and high proportion of overall income. Read more »
Spence & Partners latest blog for Pension Funds Online –
Many charities participating in local government pension schemes (LGPS) have been increasingly frustrated by the lack of recognition of the issues they face by the schemes and indeed the Department for Communities and Local Government (DCLG) who oversee them.
The issues are not new but there remains an element of denial and finger pointing and it’s very easy to see how charities could be frustrated. Read more »
In March 2015 the Department for Work & Pensions launched a call for evidence on ‘Section 75 Employer Debt in Non-Associated Multi-Employer Defined Benefit Pension Schemes’. This is a once in a generation opportunity for charities to influence government to get legislation which is seriously damaging charities financial viability. I therefore would urge charities who participate in schemes of this type to make their views known to the DWP. I’ve included a link to an article I’ve written on Civil Society Online and our response to the Consultation which should hopefully help charities with their responses. The consultation closes on 22nd May 2015 so not much time left.
With many charities now facing full balance sheet disclosure of their multi-employer pension scheme liabilities for the very first time trying to get a handle on the potential impact can be daunting. We’ve already put together a guide for charities in these schemes which explains the technical details and the key choices charity FD’s are likely to face. In addition we’ve designed a FRS102 liability calculator which will allow organisations to enter their deficit recovery contributions and recovery period and obtain an estimate of the net present value figure they’ll be likely to have to include on their balance sheet. Based upon this the calculator will also provide a proxy figure for a full disclosure equivalent to that calculated currently derived under FRS17.
From this charities should be able to see the potential financial impact and begin to consider if steps need to be taken to protect the balance sheet position. For some the steps could be relatively straightforward however for others, particularly those where this change could have a material impact, and potentially even result in a negative balance sheet, more bespoke action could be required and planning needs to begin early to consider all the alternatives.
The calculator will allow multiple calculations to be carried out, saved and printed and we hope it will provide access to a valuable resource for charities to better understand their obligations.
I am delighted to have been able to contribute to, and indeed sponsor, the publication of “Navigating the Charity Pensions Maze” produced by Charity Finance Group (CFG). I believe that this document will provide charities with an invaluable reference guide to the complex pension issues they face.
The document was launched on 10th July 2014 in London by CFG with support from Pensions Minister, Steve Webb and also included the launch of a Pensions Manifesto which highlighted the areas of importance and makes proposals how these issues could be effectively improved or reformed.
The Maze document has taken around 6 months to compile, includes detailed research carried out by CFG and covers a wide array of topics which will hopefully allow finance directors, HR managers and CEO’s to find information on the issues which affect their charity and therefore help them get the most from their pension provision. Read more »
All organisations participating in multi-employer defined benefit pension schemes need to carefully consider how the introduction of the new Financial Reporting Standard 102 will impact upon their organisation and carefully assess what options are open to them. The new accounting requirements will see many organisations who do not currently record their defined benefit pension liabilities having to do so for the first time. This could have a very material impact on balance sheets.
Organisations who already account for their scheme as a defined benefit scheme need to consider if the new legislation provides them with alternatives to their existing disclosures.
Alan Collins, Director and Head of the Employer Advisory practice at Spence, has compiled a Guide which analyses who the changes will affect, what the changes will mean and what steps to take in preparation for them. The Accounting disclosures under multi-employer pension schemes Guide is available to download here.
Recognising the difficult issues posed by pensions for many charities the National Association Of Pension Funds is holding a free seminar for charities in London on Thursday 6th February 2014. The event has gathered a series of specialist speakers with expertise on pensions and the charity sector to provide attendees with in depth knowledge on the issues faced and the potential options available.
The event is designed to be highly interactive with participants being given the opportunity to ask questions and feedback views to regulators, representative bodies and specialist advisers. This is undoubtedly an event not to be missed.
More information on the event is available here: NAPF Charities Forum
Spence & Partners Head of Charity & Not for Profit advisory services David Davison was set the challenging task of presenting a session entitled “Pensions Made Simple” at the 22nd annual Charity Accountants Conference held in Birmingham on the 19-20 September 2013. The talk covered defined benefit and defined contribution schemes, private and public sector schemes and provided the audience with an overview of the issues charities face and the potential solutions available to them. The talk was well received by the audience and slides are available here : The Charity Accountants’ Conference – Pensions Made Simple