Alarm raised over Scottish Voluntary Sector Pension Scheme

Charities call on Pensions Regulator to step in

A group of charities have written to the Pensions Regulator, urging it to look into a charity pension scheme that closes to new contributions at the end of this month.

The Scottish Voluntary Sector Pension Scheme serves 137 charities and has liabilities of about £65m, but is less than 70 per cent funded.

The scheme, run by specialist charity pensions provider the Pensions Trust, operates on a 'last man standing' basis: if any member shuts down, those remaining must meet its debts.

David Davison, a director of actuaries and pensions consultancy Spence & Partners, which has advised members of the scheme, has described the scheme as "wholly unsuitable" for many members.

He said last week that a group of member charities, which he declined to name, had written to the Pensions Regulator about the scheme. "This scheme contains a lot of small organisations with a handful of employees who cannot manage volatility," said Davison. "But it is difficult to get out. To do so would cost £6 for every £4 charities have already paid."

Stephen Nichols, chief executive of the Pensions Trust, said members had supported the decision to close the scheme. "But we are aware that a small group have collectively contacted the Pensions Regulator," he said.

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