Baptist Pension Scheme update
The deficit in the Baptist Pension Scheme (BPS) has been significantly reduced following the implementation of a key part of the Family Solution
The Family Solution, the proposal negotiated between the Pension Trustee, the BPS Employers' Group, and the Baptist Union of Great Britain (BUGB), involved BUGB making an additional cash contribution to the Scheme. This contribution has now been paid, and letters informing Scheme members and employers are being sent this week.
In the letter members were informed that the contribution was actually £33m, higher than the £30m promised by the end of 2018 after some payments due in later years were brought forward to accelerate the improvement in the funding position of the Scheme.
‘We appreciate BUGB taking such a strong initiative to help address the Scheme shortfall and ease some of the financial pressure on churches and other participating employers,’ wrote Chris Maggs, BPS moderator.
This injection means the deficit had been reduced to approximately £50m by 31 December. It had peaked in excess of £140m in the summer of 2016.
Alastair Mitchell-Baker, Moderator of Trustees for BUGB, explained that a significant motivation for the additional contribution was to protect the churches and other employers from increases in their shortfall contributions. The Family Solution means that participating employers will continue to contribute at current levels (adjusted only for inflation), for a shorter period. Members and employers were told the Scheme remains on track to clear the deficit by the end of 2028, based on employers continuing to make their required deficit contributions. (The previous recovery plan involved employers making deficit payments until 2035.)
Tim Jackson, moderator of the BPS Employers’ Group, said, 'The Family Solution is a huge step forward, reducing the deficit in the scheme substantially and taking away the danger of significant immediate increases to employer contributions.
'We can now see a path to completely clearing the deficit within 10 years, which was what the Employers’ Group set out to do when it was formed to represent the Scheme employers, which include more than 1,200 Baptist churches and other Baptist organisations. Our focus now is on keeping the recovery plan on track, and minimising the risks which could lead to employer contributions increasing or going on for longer.'
The letter to employers was jointly signed by Chris, Alastair and Tim and concludes by saying, ‘We would like to put on record our thanks to all who have worked hard to bring together the Family Solution. Significant contributions have come from across the Baptist Family and we believe this puts the scheme in a much better position than it has been for some considerable time.’