Pensions
For an introduction to pensions issues for Baptist churches, please take a look at this webinar from September 2019.
The Baptist Pension Scheme (BPS) now has its own website for all Members, Churches and Employers. Here you will be able to find out about:
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Joining the scheme
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Information for Active, Deferred and Retired Members
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Key documents you may need
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Information for Churches / Employers
And much more!
If you require assistance please contact the scheme administrators:
Broadstone Consultants & Actuaries Ltd
Canard Court
23-25 St George’s Road
Bristol
BS1 5UU
Tel: 0117 937 8700 or
send an email.
2023/2024 consultation on potential changes to The Baptist Pension Scheme – Defined Benefit Plan
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The consultation and webinar recording provided below is for members affected by proposed changes to the DB scheme. Affected Members will have received a letter in November 2023 to their home address. If you haven’t received a letter the potential changes do not apply to you.
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In June 2022, the Trustee of the Baptist Pension Scheme reached an agreement with the insurance company JUST Group ('JUST') to secure all DB Plan members’ benefits, via a 'buy-in policy'. Whilst the benefits remain part of the buy-in policy, the Scheme will continue to be administered by the team at Broadstone and the Trustee will continue with its responsibilities, including having ultimate responsibility for the payment of your benefits. However, the longer term goal is to wind up the DB Plan and secure an individual pension arrangement (or 'annuity') with JUST for each member of the DB Plan. Following this, JUST would take responsibility for paying benefits to Scheme members.
When the DB Plan finally winds up, there will be no further assets remaining in the DB Plan (as all obligations to pay benefits and the assets to meet these obligations will have been transferred to JUST) and the DB Plan will cease to exist.
All the key DB Plan benefits will be secured with JUST, including options such as exchanging pension for tax-free cash at retirement. There are however a few areas where the DB Plan benefits cannot be insured in their current form. BUGB, on behalf of relevant employers in the Scheme, is therefore proposing to provide you with modified benefits, including enhancements in some cases, wherever the current benefits are difficult or impossible to insure.
Further information on this proposal for your benefits is explained in this webinar. The security of benefits is of utmost importance to BUGB and the Trustee, and this will be their priority throughout the process of wind up. We expect the amendments to benefits to take effect from 31 March 2024.
If you missed the webinar, click below to watch the recording. Please also refer to the following accompanying documents:
2022 Buy-In and Reduced Deficit Contributions
The funding of the Defined Benefit (DB) part of the Baptist Pension Scheme has improved to the point where a buy-in with an insurance company has been carried out as a first stage to buying-out the DB which will ensure pensions will continue to be paid whilst removing risk from the Baptist family.
At the end of June 2022, the Baptist Pension Scheme signed an agreement with the insurance company Just Group (‘Just’) to secure members’ pension benefits under the Defined Benefit (‘DB’) Plan. This agreement is referred to as a ‘buy-in policy’. It follows a similar agreement with Just in 2019 that covered most pensions in payment at that time. The combined agreements mean that Just are now providing financial backing for all DB pensions provided through the Scheme’s DB Plan.
The cost of such policies is largely driven by financial markets and these have moved substantially in the Scheme’s favour, particularly over the course of the last few months. As a result, this transaction takes the Scheme out of a shortfall position for the first time in two decades. Although risks remain, the Baptist Union and the Trustee of the Scheme have agreed that deficit contributions from each participating employer in the DB Plan will reduce to just £1 per month from August 2022.
A joint
letter from the Pension Trustees and the Baptist Pensions Employers Group to employers with DB liabilities sets out more detail.
A
letter from the Baptist Union Treasurer to all churches follows up the pensions letter with a challenge about Home Mission giving.
Baptist Pension Scheme Employers’ Group (BPSEG)
Within the rules of the BPS, the Baptist Union of Great Britain has a role to represent all the employers in the scheme. To ensure that they take into account the full range of employer views in doing this, the Baptist Union Trustees have established the Baptist Pension Scheme Employers’ Group. The membership of the group is as follows:
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Tim Jackson, Treasurer, East Midlands Baptist Association and Chartered Accountant and non-executive director
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John Levick, Treasurer, Baptist Union of Great Britain
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Dean Thorpe, Treasurer, Yorkshire Baptist Association and CEO of a firm of financial advisers based in the Yorkshire/Derbyshire area
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Adrian Argile, Regional Ministry Team Leader, Heart of England Baptist Association
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Carole Sheldon, Treasurer Brighton Road Baptist Church, Horsham. Prior to retirement in 2020, Carole was an actuary working in the pensions field
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Peter Walls, Leader at Long Buckby and Brington Baptist Church and Chartered Fellow of CIPD.
The group meets quarterly and provides a report to each Baptist Union Trustee Board. Key activities of the group include:
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Overseeing the strategy of Baptists Together in relation to pensions
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Leading negotiations with the BPS Trustee on the 2016 and 2019 valuations on behalf of Baptist Union Trustees.
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Making recommendations on the use of the Baptist Union Pension Reserve fund to support individual churches or employers.
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Reviewing the design of the BPS defined contribution section.
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Working with the BPS on the scheme investment strategy.
2019 Valuation
The formal actuarial valuation of the Defined Benefit Section of the Baptist Pension Scheme as at 31 December 2019 has been completed. This was following discussions between the Scheme Trustee and representatives of the Baptist Pension Scheme Employers’ Group. The main outcomes of the valuation are:
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The deficit in the scheme has reduced to £18m from £93m at the previous valuation.
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There will be no increase in employers’ deficit recovery contributions (other than the annual uplift for inflation);
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The expectation for when deficit recovery contributions might cease is brought forward by two and a half years to June 2026; and
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A temporary reduction of 50% to the deficit recovery contributions will be put in place for the second half of 2020 to alleviate some of the additional financial pressure on employers during the Coronavirus pandemic.
The letter that was sent to employers on 3 July 2020 to communicate the detailed results of the valuation can be found
here.
2016 valuation and Family Solution
The formal actuarial valuation of the Defined Benefit Section of the Baptist Pension Scheme as at 31 December 2016 was finalised in April 2018 following negotiations between the Baptist Pension Scheme Trustee and the Baptist Pension Scheme Employers' Group on behalf of Baptist Union of Great Britain. This agreement included the Family Solution to address the deficit in the scheme. More details, including the implications for churches and other employers in the scheme and scheme beneficiaries can be found on the
Family Solution page.
If you have further questions, please
email the Pensions Employers Group.
Pensions within Church Accounts
Information on accounting for the Baptist Pensions Scheme can be found in the finance guidance leaflets F02 and F03, which can be found in the finance section of the resources library.