Pensions leave charities with cap in hand

Brian Spence

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Inappropriate and out of date pension arrangements could be significant for a growing number of charities.

Actuarial and consultancy firm Spence & Partners says many small charities and not-for-profit organisations have been encouraged to participate in local authority or multi-employer schemes.

However in light of changing pension legislation, this strategy is wholly inappropriate. Where the charity is part of a local authority scheme, or similar multi-employer arrangement, then the identification of its particular share of the assets and liabilities can be more difficult to identify than if it ran its own scheme.

In certain circumstances, such as a merger of organisations or the incorporation of a business, the extent of the liabilities become clear and during such activity the liability involved is crystalised. Few small charities and not-for-profit organisations are able to cope with the financial stress that this places on them.

Pension liabilities can come back to haunt organisations at the most unexpected times. More comprehensive details of what small charities should be looking out for can be found in an article entitled Beware of the law of inadvertent consequences on the Spence & Partners website.

For further information please contact David Davison at Spence & Partners ( on 0141 331 1004.

Issued on behalf of Spence & Partners by Blueprint Media tel 0141 353 1515

Date: Sept ’08

Brian Spence

Post by Brian Spence

Fellow of the Institute and Faculty of Actuaries and Society of Actuaries in Ireland, scheme actuary, professional pension trustee