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7
The following draft Bill will be debated during
this years General Synod. For further information
on amendments and passage through General Synod please
email the General Synod
Press Officer.
BILL NO 6
Explanatory Memorandum
CHAPTER XIV
- General
This Bill proposes substantial improvements in the benefits
provided from the Pensions Fund. It follows the triennial
actuarial report on the Fund, particulars of which are included
in the Report of the Church of Ireland Pensions Board. The Bill
also includes some other proposals.
It is proposed that the changes (other than that included in
section 18) should come into effect on the date of enactment of
the Bill or as soon thereafter as is administratively
practicable.
There are several references to "members". A
"member" is a bishop, priest or deacon in the service
of the Church of Ireland on or after 1 January 1976 other than
any who have been exempted from membership or who have exercised
their right under legislation in the United Kingdom to opt out
of membership.
The word "widow" is defined in section 2 of Chapter
XIV as including a widower.
As the Pensions Fund is an Exempt Approved Scheme, the approval
of the Revenue Commissioners (Republic of Ireland) and the
Commissioners of Inland Revenue (United Kingdom) to this
legislation will be required.
Section 1 contains a definition.
- Increases in Pensions
(a) Members
In consequence of the special increases in minimum approved
stipend effective on 1 January 2000 and 1 January 2001 pensions
payment of which commenced on or before 1 January 2001 have
fallen below parity with those where payment commenced after
that date.
It is proposed in section 12 that parity be restored to the
pensions of these members and also to the pensions of clergy who
retired before 1976.
Section 17 makes provision for increases of the same percentages
in the pensions of an archbishop and of bishops.
(b) Surviving Spouses of Members
The surviving spouse of a member (other than a member who was in
the service of the Church of Ireland on 18 May 1989 - the date
on which commutation of pensions was made available - and was 70
or over on that date or a member who was in receipt of a pension
on that date) is entitled to a pension of three-fifths of his or
her late spouse's pension or pension entitlement, which
corresponds to four-fifths of his or her net pension if maximum
commutation had been taken.
The surviving spouses of members who were in service on 18 May
1989 and were 70 or over on that date or who were in receipt of
a pension on that date are entitled to a pension of four-fifths
of their late spouses' pensions.
Each method of calculation produces the same result in monetary
terms.
It is proposed in section 10 that these fractions be increased
by one-ninth, from three-fifths to two-thirds and from
four-fifths to eight-ninths. This is the ceiling acceptable to
Revenue authorities for tax exempt schemes.
A child dependency allowance is one-third of the surviving
spouse's pension, and an increase in this will follow without
amending legislation.
Section 16 makes provision for the same increase in the pension
entitlement of the surviving spouses of archbishops or bishops.
It is proposed in section 12 that pensions of surviving spouses
and child dependency allowances which are currently in course of
payment be increased by the same fraction in addition to the
percentage required to restore parity of pensions as in the case
of members.
Section 17 makes provision for the same increase in the pensions
currently being paid to the surviving spouses of archbishops or
bishops.
(c) Widows of Clergy who died or retired before 1976
Until 1980 the widows of clergy who died or retired before 1976,
and therefore were not members of the Fund, received a pension
of £80. Since then there has been a series of increases.
It is proposed in section 11 that these pensions be increased by
the same percentages as those applicable to the pensions of
surviving spouses of members payment of which commenced on or
before 1 January 2000.
This will have the effect of increasing these pensions from
£4,196.39 to £5,301.30 and from IR£4,341.11 to IR£5,414.67.
(d) Summary
Following the enactment of this Bill the normal rates of pension
will be:
Member (gross pension) £12,724.00 or IR£12,996.00
Surviving spouse of member £8,482.66 or IR£8,664.00
Child dependency allowance £2,827.55 or IR£2,888.00
The funding required to restore parity to pensions is
£2,614,000 and IR£1,981,000.
The funding required for the proposals in (b) and (c) other than
insofar as they relate to parity of pensions is £1,083,000 and
IR£764,000.
- Years, Months and Days of Service
Until 1998 retirement benefits were calculated on the number of
completed years of service, the portion of an uncompleted year
being disregarded. The 1998 legislation provided that the
calculation would be based on the number of completed years and
months of service.
It is proposed in section 3 that the calculation should be based
in future on the number of completed years and days of service.
Section 8 is consequential.
- Contributions
Contributions are not payable in respect of a member who has
retired.
It is proposed in sections 7 and 15 that contributions should
also cease to be payable in respect of a member who continues in
service after reaching the age of 65. This will not affect the
benefits to which these members and their spouses will be
entitled.
As there is an actuarial assumption that all members will retire
on reaching normal pensionable age, funding is not required.
- Child Dependency Allowances
Children legally adopted by a member are eligible for child
dependency allowances.
It is proposed in section 2 that stepchildren of a member should
also be eligible.
- Pensions Acts
Following protracted discussions between officials of the
Department of Social, Community and Family Affairs (Republic of
Ireland) and the Department of Social Security (United Kingdom),
on the consequences of the differing legislation of the two
Parliaments relating to pension funds based in one State but
having members in the other State, Regulations have been made by
the respective Ministers operative from 31 December 2000.
These Regulations are based on certain principles, one of which
is that a member who is resident in the State other than that in
which the fund is based shall have the benefit of the
legislation of the Parliament of the State in which he or she
resides where this is to his or her advantage.
The United Kingdom legislation provides that the annual increase
in pensions payment of which commenced in or after 1997 shall
not be less than the figure for inflation as measured by the
Retail Prices Index for the previous September up to a maximum
of 5%. As this limits the discretion currently open to the Board
and the Representative Body, it is necessary to amend the
present provision to make it subject to the statutory
requirement.
This is the purpose of section 13.
- Medical Panel
(a) It is the duty of the Board to appoint a Medical Panel
consisting of three medical experts. Experience has shown that
the limitation on membership of the Panel has proved to be
inconvenient to some members and prospective members of the
Pensions Fund.
It is proposed in section 5 that the limitation be removed.
(b) The purpose of section 6 is to clarify that a report shall
come from a member of the Medical Panel and not from the full
Panel.
- Consolidation of the Constitution
To facilitate the proposed Consolidation of the Constitution
which has been initiated by the Standing Committee of the
General Synod the following have been included in the Bill. They
do not involve any change of substance.
(a) For many years the Board has elected a vice-chairman,
although such office is not mentioned in Chapter XIV. Further,
the triennial election of officers has at present to take place
before the date for completion of the triennial election of
members.
It is proposed in section 4 to repeal section 15 of Chapter XIV
and re-enact it, making provision for the office of
vice-chairman and providing that the triennial election of
officers shall take place at the first meeting following the
date for completion of the triennial election of members.
(b) When death in service benefit was introduced, the benefit
was on a sliding scale between 1980 and 1985 inclusive until it
was fixed definitively from 1986 as minimum approved stipend x
4. The provisions for the earlier period are spent.
It is proposed in section 9 that section 47 of Chapter XIV be
repealed and re-enacted omitting the references to the period
between 1980 and 1985.
(c) Section 67 of Chapter XIV relates to episcopal pensions
payment of which commenced before 1979 when the separate
episcopal funds were amalgamated with the Pensions Fund. It
consists of nine paragraphs. The first paragraph charges these
pensions on the Pensions Fund. The other eight paragraphs refer
to increases in pensions between 1985 and 1995.
As one pension which was originally paid out of a separate
episcopal fund remains in course of payment, the first paragraph
must stand. The other eight paragraphs are spent.
It is proposed in section 14 that all of section 67 except the
first paragraph be repealed.
(d) "IR£" appears four times in section 80A (1) and
(2) of Chapter XIV.
Irish Pounds will be replaced by Euros on 1 January 2002 and
will cease to be legal tender after 9 February 2002.
It is proposed in section 18 that "IR£" be replaced
by "€" from 1 January 2002.
(e) Section 80A (4) of Chapter XIV was enacted in 1998 when
normal pensionable age was reduced from 67 to 65 to define the
rights of those members who were aged 65 or 66 on the operative
date. It is spent.
It is proposed in section 19 that it be repealed.
CHAPTER XV
Supplemental Fund - Reporting
The Board is required to set out in its Report each year to the
General Synod the rules and regulations regarding assistance from
the Supplemental Fund in force during the year.
Compliance with this requirement takes considerable space in the
Report. It consists largely of reprinting what has appeared in
Reports for earlier years with changes confined to monetary amounts
and dates.
The Board does not consider that this is any longer necessary. The
number of grants is greatly reduced, and it will continue to fall.
On 31 December 1987 there were 219 grants in course of payment. The
corresponding figure on 31 December 2000 was 48.
It is proposed in section 20 that the present provision should be
replaced by a direction that the Board report to the General Synod
any changes made to the rules and regulations during the year.
* * * * * * * * * * * * * * * * * * *
LADY SHEIL
(at the request of the Church of Ireland Pensions Board)
BILL
To amend Chapters XIV and XV of the Constitution.
WHEREAS it is desirable to improve the benefits provided under
Chapter XIV of the Constitution and to make sundry other amendments
to the said Chapter;
AND WHEREAS for such purposes it is necessary to amend Chapter XIV
of the Constitution;
AND WHEREAS the Church of Ireland Pensions Board has certified that
on the enactment of this Statute the Fund will remain solvent as
required by Section 16 (1) of Chapter XIV of the Constitution;
AND WHEREAS it is desirable to simplify the reporting procedure
concerning the Supplemental Fund as set out in Chapter XV of the
Constitution;
BE IT ENACTED by the Archbishops and Bishops and the Clergy and
Laity of the Church of Ireland in General Synod assembled in Dublin
in the year 2001, and by the authority of the same, as follows:
- In this Statute 'Chapter XIV' means Chapter XIV of the
Constitution of the Church of Ireland, and 'Chapter XV' means
Chapter XV of the said Constitution.
- For section 2 (1) (c) of Chapter XIV there shall be
substituted the following paragraph:
'(c) 'orphan' or 'child' as the case may be shall include a
stepchild and a child legally adopted by a member of the Fund.'
- In Section 2 (1) (i) of Chapter XIV for the word 'months'
there shall be substituted the word 'days'.
- For section 15 of Chapter XIV there shall be substituted the
following:
15. The Board shall, at its first meeting after 30 June 2003,
and triennially thereafter, elect a chairman, a vice-chairman,
and an honorary secretary out of its own members. The chairman,
or in his absence the vice-chairman, shall have a casting as
well as an ordinary vote on all questions. Casual vacancies in
any of the offices referred to in this section may be filled at
any meeting of the Board, the person so elected to hold office
until the next triennial election.
- Section 31 of Chapter XIV is hereby amended by inserting the
words "not less than" before the word
"three".
- Section 32 (1) of Chapter XIV is hereby amended by inserting
the words "member of the " before the words
"Medical Panel".
- In Section 34 of Chapter XIV for the words 'A contribution
shall not be payable in respect of any period after retirement'
there shall be substituted the following:
Provided that no contribution shall be payable in respect of any
member after that member has reached the age of 65 years or has
retired whichever is the earlier.
- In Section 35 (2) of Chapter XIV the words 'provided that no
payment shall be made in respect of a period of less than one
month' shall be deleted.
- For section 47 of Chapter XIV there shall be substituted the
following:
47. Where on or after 17 May 2001 a member dies while in the
service of the Church of Ireland before reaching the age of 65
years and in respect of whom a contribution has been paid to the
Fund, there shall be paid to his legal personal representatives
a lump sum calculated in the following manner, that is to say,
the minimum approved stipend of the office held by the member
concerned as fixed by the General Synod in accordance with
section 51 (1) of Chapter IV of the Constitution in force on the
date of death of the said member multiplied by four.
- Sub-section (1) of section 49 of Chapter XIV is hereby amended
(a) by substituting '17 May 2001' for '14 May 1998' and
'two-thirds' for '60%' in paragraph (a);
(b) by substituting 'eight-ninths' for '80%' in paragraph (b);
(c) by substituting 'two-thirds' for '60%' in paragraph (c).
- For section 59A (1) of Chapter XIV there shall be substituted
the following:
59A. (1) The rate of annuity payable under section 4 of this
Chapter to the widow of a clergyman (not being the widow of a
voluntary member) shall be increased with effect from 1 June
2001 by 26.33% in the case of annuities payable out of the
Clergy Pensions Fund (Northern Ireland) or by 24.73% in the case
of annuities payable out of the Clergy Pensions Fund (Republic
of Ireland).
- For section 59 of Chapter XIV there shall be substituted the
following:
59. (1) The rate of each pension payable to a clergyman under
section 4 or any of sections 42 to 45B (inclusive) of this
Chapter, payment of which commenced on or before 1 January 2001,
and which is in course of payment on 31 May 2001, shall be
increased with effect from 1 June 2001 in accordance with the
following Table:
|
Commencement of pension |
Rate of increase |
| |
Northern Ireland Fund |
Republic of Ireland Fund |
| On or before 1
January 2000 |
13.70% |
12.26% |
| After 1 January
2000 and on or before 1 January 2001 |
6.71% |
6.56% |
(2) The rate of
(a) each pension payable to the widow of a clergyman under
section 49 of this Chapter, and
(b) each child dependency allowance payable under section 54 of
this Chapter,
payment of which commenced on or before 1 January 2001, and
which is in course of payment on 31 May 2001, shall be increased
with effect from 1 June 2001 in accordance with the following
Table provided that the total of pension and child dependency
allowances shall not in any instance exceed the limit permitted
by the revenue authorities:
| Commencement of pension |
Rate of increase |
| |
Northern
Ireland Fund |
Republic of
Ireland Fund |
| On or before 1 January 2000 |
26.33% |
24.73% |
| After 1 January 2000 and on
or before 1 January 2001 |
18.57% |
18.40% |
(3) Where the pension of a clergyman payable under any of
sections 42 to 45B (inclusive) of this Chapter commenced on or
before 1 January 2001 and such clergyman has died before 1 June
2001, any pension or child dependency allowance in course of
payment on 31 May 2001 to or in respect of the widow or a child
of any such clergyman shall for the purposes of this section be
deemed to have commenced on the date of commencement of payment
of pension to such clergyman.
- In Section 60 of Chapter XIV for the words 'by such
percentage, not exceeding the lesser of the percentage permitted
by law and 5% as the Board on the advice of the actuary and with
the approval of the Representative Body may determine' there
shall be substituted the following:
'by the percentage required by law, or such greater percentage
up to 5% as the Board on the advice of the actuary and with the
approval of the Representative Body may determine.'
- Section 67 of Chapter XIV (other than the first paragraph of
the section) is hereby repealed.
- For Section 68 (5) of Chapter XIV there shall be substituted
the following sub-section:
(5) A contribution prescribed under sub-section (1) or
sub-section (2) shall not be payable in respect of any
archbishop or bishop after that archbishop or bishop has reached
the age of 65 years or has retired whichever is the earlier.
- Section 76 of Chapter XIV is hereby amended
(a) by substituting '17 May 2001' for '14 May 1998' and
'two-thirds' for '60%' in sub-section (A1);
(b) by substituting 'eight-ninths' for '80%' in sub-section (1);
(c) by substituting 'two-thirds' for '60%' in sub-section (2).
- For section 78AA of Chapter XIV there shall be substituted the
following:
78AA. The rate of each pension payable to an archbishop or a
bishop or to the widow of an archbishop or of a bishop, payment
of which commenced on or before 1 January 2001, and which is in
course of payment on 31 May 2001, shall be increased with effect
from 1 June 2001 in accordance with the provisions of section 59
of this Chapter.
- (1) In subsections (1) and (2) of section 80A of Chapter XIV
for "IR£" wherever it occurs there shall be
substituted "€".
(2) This section shall come into operation on 1 January 2002.
- Subsection (4) of section 80A of Chapter XIV is hereby
repealed.
- For section (3) (d) of Chapter XV there shall be substituted
the following:
(d) report to the General Synod upon any changes made to the
rules and regulations concerning assistance from the Fund during
the preceding year.
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