CFDG to ascertain scale of sector pensions shortfall

Finance | Tania Mason | 22 Feb 2010

CFDG is to begin a consultation process with its members to identify the scale of the pension deficits in the sector and thrash out options for addressing them.

Figures released by actuarial services company Alexander Forbes last month revealed that deficits from the sector’s 20 largest fundraising charities had grown to £720m by the end of the year, an increase of around £100m in just six months. Two charities, Barnardo’s and the National Trust, now have holes of more than £100m in their pension funds.

CFDG intends to lobby the Pensions Regulator to encourage it to treat charities differently from private companies, but says it first needs to gather some hard data regarding the size of the problem and consult its members about the sort of concessions they would like the regulator to grant.

Some charities have already asked the Pensions Regulator to give them twice as long to plug their deficit as it would usually allow private companies. Barnardo’s for instance, which has a shortfall of £141m, has put forward a plan to allocate £4.6m a year for 20 years to its deficit. It is waiting to hear whether the regulator will approve this.

CFDG head of policy Angela Haynes said that CFDG would argue to the regulator that charities were in a peculiar situation because they have to raise money from the public, and donors might be less likely to give if they thought they were simply funding a pension shortfall.

CFDG met with the Pension Protection Fund last year and after that a small group of charity finance directors, led by Barnardo’s Kevin Barnes, formed a working group on the issue. Haynes said CFDG would now be supporting the group to conduct research among its membership and ascertain how to proceed.

“We need to get a handle on the size of the problem as what has been reported so far may only be the tip of the iceberg,” she said.

Directory: Charity Finance Directors' Group (CFDG)

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