Charities are increasingly reviewing the pension benefits that they provide to staff. Some participate in the Local Government Pension Scheme (LGPS), the NHS Pension Scheme, the Teacher’s Pension Scheme or another defined-benefit pension scheme. However with reducing income streams and rising costs, many are reviewing whether they can continue to offer defined-benefit pensions.
With many charities having to restructure and/or change terms and conditions, they are keen to minimise the substantial pension strain costs that can arise in the LGPS, both in redundancy and restructuring situations. Often these costs are unavoidable, but we have advised a number of LGPS employers on how best to manage change programmes to minimise the impact on redundancy and business efficiency. We also help employers ensure that decisions on ill-health benefits are appropriately managed, to avoid unnecessary costs.
Strategic advice on charity pension schemes
Some charities have made the decision to close access to defined-benefit pensions, either for all staff or for new joiners. Where the decision is made to close to all staff, consultation is required with a view to reaching agreement with staff about that change. We have helped a number of charities to close access to defined-benefit pensions schemes, working with them to ensure effective consultation and negotiation with a view to reaching agreement, as well as advising on how to go forward if agreement can’t be reached. As part of our service, we help charities to liaise with pension schemes to agree the terms of exit, including how exit payments will be structured, where relevant.
With the lifetime allowance affecting an increasing number of staff, we advise charities on putting in place alternative arrangements for those who have reached the lifetime allowance. Additionally, with charities looking to merge, form new group structures or re-organise existing ones, we help to ensure that there is no unexpected crystallisation of employer debts as a result of the arrangements put in place.
Some charities are looking to grow their income by bidding for contracts with local authorities or NHS commissioners. When bidding, the requirement to ensure that transferred staff can still access the LGPS or NHS Pension Schemes (or a broadly comparable scheme) is more relevant than ever. The risks of variable contribution rates, additional contributions, exit payments and the requirement to obtain a bond are significant and being clear about what risks a contractor is expected to take on is critical. We have considerable experience in advising and negotiating detailed pension arrangements in outsourcing situations and helping charities ensure that they understand the arrangements they are entering into, so that risks can be managed appropriately.
If you would like further support and advice regarding pensions, or simply want to understand how we could help you, please get in touch.
We have been recognised for the work we do
Finally, there is a glimmer of hope that perhaps the Covid-19 pandemic could be reaching its end.
The Guidance for the extended Coronavirus Job Retention Scheme (CJRS) was released last night on 10 November 2020. We thought we knew what we were expecting or so we thought...
Last week, England entered another period of lockdown which will last until at least 2 December.
Is it just me or are the updates and product launches of the of the Coronavirus Job Retention Scheme “CJRS” starting to resemble the seemingly continuous barrage of new and upgraded iPhones?
It has been another difficult few weeks for many of us, especially those who find themselves under tier 3 restrictions.
Government regulations came into force on 23 September 2020 providing LGPS (local government pension scheme) employers with flexibility on meeting exit payments and LGPS funds with flexibility too
Charity Financials, the financial information program from Wilmington Charities, has published its latest Income Monitor report.
As employers face the end of the Coronavirus Job Retention Scheme on 31 October 2020, Katherine Sinclair and Libby Hubbard discuss the intricacies of the redundancy process for furloughed employees.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Catch up with all the latest charity updates in this fortnight’s news roundup
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.