Comments: CofE clergy pensions contribution raised to 45%

Why are clergy pension plan contributions so very much higher than other final salary schemes? At our college, it makes no financial sense (not by a long shot) to pay into the clergy pension plan when we have other plans available (the USS scheme for universities). This is not a new problem: the contribution levels have been out of whack for years and years. Years ago we heard that the plan suffered from property investments, but that was before the latest property bubble, and this plan didn't seem to reciver like the others....


Posted by Joe at Thursday, 23 April 2009 at 8:07pm BST dioceses fund pensions from parishes, and given a 20k£ baseline , and a 5.3% increase that is £1060 on the average parish share of a single stipend supporting parish, modified by the OXLIP/poverty factor.
Tell me I am wrong someone please.

Posted by dodgey_vicar at Thursday, 23 April 2009 at 11:13pm BST


Because they are calculated as a percentage of the stipend only, which is only part of the total remuneration received. The key element here is the value of the housing provided.
Ordinary people are paid a salary, out of which they provide themselves with housing. And their pension contribution is calculated as a % of that salary.

Oh, and the other reason is because it is a final salary scheme, where the employer is taking all the investment risk. In the outside world, such schemes are disappearing faster than you can count. And many of us never had them in the first place.

Posted by Simon Sarmiento at Thursday, 23 April 2009 at 11:33pm BST

Hi Simon,

I realise that the 2/3rds of the minimum stipend is higher than the normal 40/80ths used in many final salary schemes, and also that the church pays the full whack (the clergy don't contribute), but the pension is based only on the minimum national stipend, not on the actual stipend received and not on the value of the housing provided (though some clergy can ask for subsidized housing in retirement). The Universities Superannuation Service, with whom I have my pension (and which has only a small pension deficit after the downturn), provides 40/80ths at a cost of 6.35% to me and 14% to the college, though I think the college contribution is going up a bit. Moreover the pension is a final salary scheme in a context where the final salary is usually much larger than the average salary over the years of employment (whereas in the Church the stipend generally only increases at or around the inflation rate). Given the difference in the 2/3rds 40/80ths, one might expect the clergy contribution rate to be about 30%, but given the lack of salary increments and the use of the national minimum, I'd expect the clergy pension costs to be much closer to the 20% rate. Of course, perhaps clergy live much, much longer than other people....


Posted by Joe at Friday, 24 April 2009 at 12:31am BST

You won't be surprised to know that the C of E explpoits, and treats retired ministers with even more contempt that serving ministers.

Imagine that

Posted by Rev L Roberts at Saturday, 25 April 2009 at 5:45pm BST

dodgey_vicar, I do not know - perhaps someone more informed can explain - but I think you're reading it right: the Dioceses seem to have just been given an increase in clergy costs of 5.3% from this coming January. Since I already have a draft Diocesan budget for 2010 in my hands for ratification at Diocesan Synod in two weeks, we live in interesting times. :(

Joe, I wonder if the real issue is the proportion of active members in the CofE scheme to retired members? 9000 active to 13000 retired sounds hard ratios.

I think clergy stipends have risen somewhat in the last few years haven't they? not in any way saying that hasn't been right but at one point they got really low, relative to other comparable jobs and that has been corrected somewhat perhaps?? If that's right, that can't help.

Rev L Roberts, I'm trying to imagine it. I'm not sure what you mean? Surely with a final salary scheme, retirees at least know what they're (not) going to get - so they're at least aware of what is coming?!

Posted by Neil Barber at Saturday, 25 April 2009 at 10:09pm BST

When I was ordained in 1980 I seem to remember the retirement benefits were 50% of minimum stipend. It was raised to two thirds in the mid 80's I think. I hope a defined salary scheme will be kept however bad things get, perhaps with benefits reduced, perhaps to 60% of stipend.Clearly the C of E's financial problems seem fairly critical if it is going to seek to keep as many full time clergy as it now has.How do you run a National church as a voluntary body without a european style church tax. I doubt it can be done, alas!

Posted by Perry Butler at Monday, 27 April 2009 at 6:32pm BST
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