Director of finance and corporate finance Ian Chivers estimated that the decision to stop future accrual had cut the children’s charity’s deficit from £50m to £20m, leaving the scheme able to pay off the shortfall within five to 10 years.
“We did look at alternative measures, and our members and the trade union Community came up with some really good ideas, including boosting member contributions,” Chivers said. “Unfortunately, the deficit and our liabilities were just too great and we needed to be confident that we could meet our past obligations.”
“We’ve tried to take a practical approach to this. We’ve generated what we hope are reasonable transition plans and we’ve delayed the implementation of the measures by three months,” he said.
The 900 members affected by the change will be given a three year transition period during which the charity will continue to make an 8% contribution to their pensions without members contributing. However, members who choose to contribute 4% will benefit from an increased employer contribution of 12%.
In addition, members aged 55 or over by December 31, 2009, will be able to take their pension at age 60 without suffering an actuarial reduction.
Following the end of the transition period, staff will become part of the existing defined contribution arrangement, which typically doubles member contributions up to a maximum of 12%.
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