Majority of defined-benefit charity pension schemes 'are strong or tending to strong'

A letter to MPs from the Pensions Regulator says this is better than average across all sectors

More than two-thirds of defined-benefit pension schemes at charities are "strong" or "tending to strong", according to the Pensions Regulator, which is better than the average across all sectors.

In a letter to Frank Field MP, chair of the Work and Pensions Select Committee, Lesley Titcomb, chief executive of the Pensions Regulator, said 62 per cent of defined-benefit pension schemes involving charities were "tending to strong".

Another 5 per cent were deemed as strong, the letter says.

In comparison, only 44 per cent of all defined-benefit pension schemes are classified as "tending to strong" and 13 per cent are deemed to be "strong", meaning that charities’ schemes are outperforming the average across all industries.

The figures were released in response to a letter from Field in which he raised concerns about charities shouldering the burden of historic pension liabilities.

Field’s letter, part of his committee’s inquiry into defined-benefit pension schemes, asked for information from the regulator about the number of schemes involving charities and the financial health of those schemes.

The response from the Pensions Regulator says there are 290 defined-benefit pension schemes that have charitable sponsors, as well as multi-employer schemes such as the Pensions Trust that involve thousands of smaller charities.

The regulator says in the letter that 83 per cent of the schemes that have charitable sponsors are in deficit, against a national average of 78 per cent.

Despite this, the regulator says, charities represent a small proportion of the overall pensions sector – approximately 1 to 2 per cent, the letter says. It adds that between 10 and 20 schemes account for 45 per cent to 60 per cent of the charitable subsector.

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