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Church Of England Pension Scheme 'is Riskiest In The Country'

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Telegraph 21/1/14

'The pension scheme for Church of England clergy is “the riskiest in the country”, according to a leading expert. John Ralfe, the independent pensions consultant who was widely praised for the way he ran the Boots pension scheme, made the remarks as he accused the Church of England scheme of “not telling the truth” about the size of its deficit.

Mr Ralfe has written to the Archbishop of Canterbury, Justin Welby, to ask him to commission a report into the scheme’s funding.

The scheme, has 16,400 members, including 5,800 pensioners, says it has a deficit of £293m but Mr Ralfe put the figure at £391m.

He said the scheme had got into trouble as a result of a “bet” on shares that had “not paid off”. The scheme has 93pc of its money in shares and other “risky” assets, according to Mr Ralfe, which he said was the highest figure of any pension scheme in Britain.

“I know of a few schemes where the figure is in the 70s or 80s per cent, but I don’t know of any others that have more than 90pc of their assets in shares and similar assets,” he said. “In 2009 the Church scheme was 100pc in shares, although it has been slowly cutting the exposure in recent years.”

He added: “In terms of the choice of asset type the Church of England scheme is the riskiest in the country.”

Pension schemes, in common with many other long-term institutional investors, normally hold a spread of different assets in addition to shares. These include bonds – IOUs issued by companies and governments that pay a fixed rate of interest before returning the original sum in full – and property, as well as more exotic investments such as hedge funds.

Many pension schemes have increased their holdings in bonds in recent year because shares are seen as too volatile. The FTSE 100 index, for example, roughly halved in value between its peak at the turn of the millennium and the sell-off in the run-up to the Irag war in 2003.

Mr Ralfe said the Church’s pension fund “isn’t telling the truth, the whole truth and nothing but the truth” about its deficit. “Mr Welby should instigate a report into the true state of its finances and put it to the dioceses, who are responsible for funding the scheme.

“The pension scheme is storing up problems for the future.”

It has already cut benefits and raised the retirement age to 68 in response to its funding problems.

A scheme spokeman said 78pc of its assets in shares, or 73pc on an “effective” basis once complex methods of reducing risk were taken into account.

He also dismissed Mr Ralfe's claim about its deficit as "simply inaccurate".

He said: "At the last valuation of the scheme, on 31 December 2012, the funding deficit was 25pc, and we are on target to be fully funded over the next decade. Had the valuation been carried out at the end of 2013, we might have expected the funding deficit to be closer to 15pc."

He added: "Mr Ralfe has raised these sorts of issues in the past, but has refused numerous offers by the Church of England Pensions Board to meet to discuss this matter."

He said the scheme also had a "healthy contribution inflow" from new members.

As adviser to the Boots pension scheme, in 2001 Mr Ralfe dramatically sold all its shares and reinvested the proceeds in bonds. At the time the move was controversial but it resulted in the scheme avoiding the sharp ups and downs of the stock market this century and instead benefiting from the bull market in bonds.'

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The LORD will provide ...

Practice poverty, chastity, humility ...

Or just hand 0.0001% of that property portfolio to the pension fund and put it in surplice ;)

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There will be a mighty smiting! :huh:

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