Caron Bradshaw and Andrew Weil advise on the best course of action for an unincorporated charity with a shortfall in its pension pot.

A charity scenario

The unincorporated charity relies heavily on volunteers but does have a very small staff team. Its very first full-time employee was offered a final salary defined benefit (DB) pension about 25 years ago. When the second full-time employee was taken on the trustees, having become more aware of problems relating to DB pension schemes, closed the existing scheme to new employees and set up a defined contribution pension scheme. They believed they had addressed the pensions problem and that all was well.