The NSPCC has agreed a deal to cover £63m of its pensions liabilities with Pension Insurance Corporation, a specialist provider of insurance services for defined benefit pension funds.
The agreement means that the NSPCC has agreed to transfer £63m of assets to PIC. In exchange, PIC has agreed to make payments to cover the charity’s liabilities for all the retired members of the NSPCC’s defined benefit pension scheme.
The deal will not cover members of the pension scheme who have not yet retired.
According to its most recent accounts, for the period up to March 2012, the NSPCC’s defined benefit scheme had total assets of £160.7m and a deficit of £5.5m.
Under a defined benefit pension scheme, an organisation guarantees that it will pay retirees a certain benefit in retirement. Most defined benefit schemes are in deficit because they underestimated how long people were likely to live, and because markets have underperformed against expectations.
The NSPCC defined benefit scheme has been closed to future accruals since 2009.
The charity now runs a defined contribution scheme, where it agrees to make payments into a pension scheme, but does not guarantee a final value for employees’ pensions.
Several other large charities face substantially larger pension deficits, including Barnardo’s, which has a deficit of £83.9m, and which announced proposals in January to close its scheme to future accruals by existing members.