Defined-benefit pensions 'attract staff'

Many charities have no plans to close schemes, Charity Finance Directors' Group members survey finds

Almost half of charities with defined-benefit pension schemes still feel they are necessary to recruit and retain the right staff, a survey of Charity Finance Directors' Group members has shown.

The poll of 70 CFDG members, carried out by accountancy firm PricewaterhouseCoopers, found that of those that still had open schemes, 43 per cent had no plans to close them.

Many charities have closed their defined-benefit schemes to new entrants because of fears about soaring pension liabilities.

Liz Hazell, head of charities at PwC, said many charities felt they needed to retain defined-benefit schemes to attract good employees, but were worried about the cost of repayments.

"There is a real conflict of interest for many charities," she said. "Even the ones that have closed their schemes to new entrants still have to make up a shortfall in their contributions.

"We have found that the majority of charities don't realise they can often lower their repayments by reviewing their employer covenants.

"This is effectively a review of their ability to pay. And if charities are able to prove that they have a better financial situation than the actuaries have calculated, they might be able to reduce their payments."

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