The Synod: The CofE’s ominous financial situation
Although the Synod’s five-day agenda is going to be dominated by women bishops, there is another less glamorous crisis at hand: the CofE’s gigantic pension shortfall.
Stiffed by the credit crunch and certain dubious investments, the liabilities in the Church’s pension fund have ballooned in the past couple of years. Recent figures show that the deficit on the scheme rose to £352m ‘as a consequence of the general fall in share prices in 2008 and the fall in the yields on government securities which are used to calculate pension scheme liabilities’.
This £352m, recorded on 31 December 2008, is more than double the previous shortfall figure – £141m – from December 2006. In other words, the recession had a massive effect on the fund, but Church financiers aren’t aided by the fact that retired priests tend to live much longer than the general population in this country.
In upshot, the Synod will be faced with some stark decisions on how to solve the crisis: there simply isn’t a quick fix.
The headline measure is a proposed increase of the retirement age to 68 from 65 – a massive jump by any measure, but one seen as necessary and urgent. Priesthood being what it is – a vocation not a job – many of the clergy do stay on past 65 in certain capacities, and sometimes past 70. However, there’s a world of difference between this practice being voluntary and being mandatory.
There are various other austerity measures on the table. The accrual rate – the rate at which pensions build up from salaries – could move from 1/40 to 2/83, for instance.
“The key thing to remember is that we are trying to maintain a final stipend scheme [clergy receive a stipend, not a salary], when everyone else is getting rid of it,” a spokesman for the Church told me this morning. Sacrifices have to be made, it seems, for the greater good.
Finances are part of the reason that the CofE’s evangelical segment wields such disproportionate power. Most parishes do not rake very much money in from their congregations via collections – many worshippers tend to be older and not well off. Evangelical parishes, however, generally have younger, larger and more committed congregations, and they’ve become good at encouraging people to tithe – that is to say give 10 per cent of their annual income.
These parishes duly become richer, and more able to contribute funds to the central pot than all the others. As a result, despite being relatively few in number, their financial clout means they have to be kept sweet.
Another issue of note, though not one due to be debated at the Synod, is that of so-called ‘Non-Stipendiary (unpaid) Ministers’. Some parishioners have pointed out the cost savings stemming from the apparently steep increase in the number of NSMs currently working for the Church, mostly part-time. A few ‘House for Duty’ posts are also appearing on the radar, where a priest works part-time purely in return for the free use of the vicarage. It will be measures like these that the CofE may increasingly have to turn to, if it wants to survive times of austerity.
Recent Posts on Uncategorized
- Palm Reader: Beside The Ones We Love - Exclusive Album Stream
- Lost in the Riots Interview: ‘If you’d told us we’d be going to Europe with this band four times, we would've told you to bugger off!’
- Mother's Day message from Rainbow Trust
- Hawk Eyes – ‘Everything is Fine’ Album Stream
- Pianos Become The Teeth Interview – “With 'Keep You' we felt like we could stretch our wings"
Latest from Independent journalists on Twitter