F23
The Church Workers Pension Fund was established in 1953 with the aim of creating a pension fund for staff who were not ordained but working in employment associated with the Church of England.
There are two types of scheme available:
The Church of England Defined Benefits Scheme
Under this scheme the employer decides on what basis the pension will be paid - 1/60th,1/80th or 1/100th of the pensionable salary for each year of service. Often referred to as a “final salary scheme” the cost to the employer is variable as the sum needed to fund the benefit can change. A PCC would need to think carefully whether this option was affordable.
The Church of England Defined Contributions Scheme
Under this scheme, often referred to as a “money purchase” scheme, the employer decides how much money to put in each year to provide for a retirement income. The value of the funds within the scheme will grow each year with interest - and bonuses when investments do well. The PCC would need to consider carefully whether sufficient funds were being invested to generate an adequate pension.
As a general rule the Contributions Scheme is probably better for the small employer as the contributions being made are known and can therefore be budgeted for.
Under both schemes employees can, at the moment, make additional voluntary contributions of up to 15% of taxable earnings.
Stakeholder Pensions
Stakeholder pensions were introduced in April 2001. They are intended to provide a low-cost pension option for people who are not currently making provision for retirement. Employers, unless they are exempt from the requirements, are obliged to provide access to a designated stakeholder pension for their employees. They provide a route for saving towards retirement for people who do not have any earnings from employment as up to £3,600 a year may be paid to a stakeholder scheme irrespective of earnings.
There are many different arrangements that individual employers make and the above is only a very general guide. Should you wish to receive further information please contact:
The Church of England Pensions Board
29, Great Smith Street,
LONDON,
SW1P 3PS
Telephone: 020 7898 1800
