Rt Rev JE Moore, Bishop of
Connor
Rt Rev JRW Neill, Bishop of Cashel
S Gamble (resigned January
2001)
Ven DS McLean
WT Morrow
Lady Sheil
Rev ECJ Woods
Canon JLB Deane
Rev Canon VES McKeon
HT Morrison
Mrs JM Peters
RP Willis
Chairman – Canon JLB Deane
Vice Chairman – Lady Sheil
Honorary Secretary – Rev Canon VES McKeon
Trustee – The Representative Church Body
Actuarial Advisers – Mercer Ltd
Investment
Managers – Lazard Brothers Asset
Management (London)
Bank of Ireland Asset Management Ltd (Dublin)
Assistant Secretary – JF Buttimore
Pensions and Welfare Officer – PG Connor
Rev Canon VES McKeon
WT Morrow
Lady Sheil
Office: Church of Ireland House
Church Avenue
Rathmines Telephone
no 01-4978422
Dublin 6 Facsimile
no 01-4978821
During
2000 six meetings of the Board were held.
Mr S Gamble resigned from the Board
in January 2001. The Standing Committee
will appoint a member in his place.
Contributors for
full benefits 1 January 2000 |
|
498 |
|
Additions: |
Newly ordained clergy |
|
11 |
|
Clergy who re-entered service |
|
4 |
|
Clergy who
entered service from other churches |
|
4 |
|
Clergy who entered service from
other posts |
|
2 |
|
|
|
_____ |
|
|
|
519 |
Deductions: |
Clergy retired on pension |
12 |
|
|
Clergy who died in service |
- |
|
|
Clergy who have left service with
entitlement to deferred benefits |
|
|
|
Clergy who have left service and transferred their benefits to another fund |
|
|
|
|
_____ |
_____ |
|
|
|
494 |
|
|
|
_____ |
Age distribution of Contributors
|
under 26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
Clergy |
3 |
25 |
48 |
49 |
74 |
66 |
74 |
72 |
60 |
20 |
3 |
494 |
There are 12 clergy in the full time stipendiary ministry who are not members having been granted exemption on entering service and there is one who elected to leave the Fund and make independent pension arrangements.
Retired clergymen on pension 1 January 2000 |
261 |
|
Add: |
Retirements during the year |
13 |
Deduct: |
Ceased on death during the year |
(12) |
|
|
_______ |
Retired clergymen on pension 31 December 2000 |
262 |
|
|
|
_______ |
Note: the total of 262 includes 5 clergy who are in receipt of deferred pensions.
Widows on pension 1 January 2000
(adjusted) |
259 |
|
Add: |
Commenced during the year |
10 |
Deduct: |
Ceased on death during the year |
(14) |
|
|
_______ |
Widows on pension 31 December 2000 |
255 |
|
|
|
_______ |
Note: the total of 255 includes 22 widows of voluntary contributors.
Child
Dependency Allowances 1 January 2000 |
6 |
|
Commenced during the
year |
- |
|
Deduct: |
Ceased during the
year |
2 |
|
|
_______ |
Child Dependency Allowances 31 December 2000 |
4 |
|
|
|
_______ |
The following shows the annual rate of pensions etc in payment at 31 January 2001:
|
IR£ |
|
£ |
Clergy |
950,525 |
and |
1,201,957 |
Widows and Orphans |
701,469 |
and |
672,343 |
|
|
|
|
|
________ |
|
________ |
|
1,651,994 |
and |
1,874,300 |
|
________ |
|
________ |
There are 84 clergy with entitlement to deferred benefits.
Under the provisions of the Fund pensions and annuities in payment at the end of each year are increased on the following 1 January. The amount of increase is determined by the Board on the advice of the actuary and with the approval of the Representative Church Body, such percentage not exceeding the lesser of the percentage permitted by law and 5%.
The cost of funding this benefit for those members who are directly in the service of the Church of Ireland is met from central funds. The amount required on 1 January 2001 is IR£269,222 plus £361,700 (equivalent to IR£725,683) and is included as one of the grants recommended to the General Synod for allocation from the Income and Expenditure Account of the Representative Church Body.
Pensions in payment on 31 December 2000 were increased by 5% on 1 January 2001, except those being paid to a widow of a voluntary member.
Under the provisions of the Fund a lump sum is payable in a number of eventualities. The following is a summary:
On death in service or within 5 years following retirement
On retirement before reaching 65 years of age a member may elect to commute part of his pension
On reaching 65 years of age a member may elect to commute part of his pension whether or not he actually retires
On retirement after reaching 65 years of age a member may elect to commute part of his pension if on reaching 65 years of age he decided to defer a decision until his actual retirement.
During 2000 lump sums totalling IR£93,307 and £72,665 became payable under the above headings in respect of 8 members as follows:
died in service (0); continued in service having reached 65 years of age (3); on retirement (3); died within 5 years following retirement (1); deferred paid at age 70 (1).
The explanatory booklet designed to give a broad outline of the Pensions Fund and the benefits provided is available from the Assistant Secretary.
Members who will not have completed 40 years of service on reaching 65 years of age will not qualify for a full pension. However, subject to limitations contained in civil legislation the members concerned may purchase additional service by making additional personal contributions either by monthly deduction or by the payment of a lump sum, or by a combination of the two. These contributions qualify for full income tax relief at the highest rate payable by the contributor.
At present 93 members are participating in the Scheme. Many more are entitled to do so and the Board commends it for serious consideration by all those clergy who are in this category.
Copies of the Regulations and explanatory memorandum may be obtained on request to the Assistant Secretary.
The Board sought the advice of the
Actuary regarding the costs of implementing a number of possible changes in the
benefits structure in the light of the results of the triennial valuation. As a consequence of the valuation results
the Board is able to honour its policy to ensure that parity is restored to the
pensions of those members whose pensions commenced on or before 1 January 2001.
In view of the
satisfactory outcome of the valuation which showed surpluses of IR£5.855m and
£0.683m the Board is recommending the following:-
1. Increasing pensions of clergy, payment of
which commenced on or before 1 January 2001.
2. Increasing widows pensions, payment of which
commenced before 1 January 2001.
3. Increasing spouses pensions from 60% to 66.66% of members pension.
4. The inclusion of stepchildren for Child Dependency Allowances.
5. Calculation of pension benefits on the number of
completed years and days of service.
6. Cessation of contributions payable in respect of a member who continues in service after reaching the age of 65.
The actual cost of these improvements will amount to IR£2.745m and £3.697m. This result is a net actuarial liability of IR£0.868m.
Details of the changes are set out in the Explanatory Memorandum to the Bill being submitted to the Synod.
As reported last year
it was anticipated that regulations would be approved by the respective
ministers having the effect of:-
(a) exempting qualifying Irish schemes from
certain provisions of UK pensions legislation;
(b) exempting qualifying UK schemes from certain
provisions of Irish pensions legislation.
These regulations are intended to
remove difficulties caused by dual regulation of schemes with members in both
Ireland and the UK.
The regulations were adopted with
effect from 31 December 2000.
The intention of the regulations is
that Irish regulation will be the source of protection for UK members of Irish
schemes and correspondingly that UK regulation will be the source of protection
for Irish members of UK schemes. Both
UK members of qualifying Irish schemes and Irish members of qualifying UK
schemes will therefore be entitled to UK statutory benefits (which are overall
greater than the corresponding Irish benefits) under the relevant country’s
legislation.
A formal letter to all members resident in Northern Ireland outlining the regulations will be sent during the year.
The Board approved regulations in connection with the above with effect from 1 June 2000. These are included in Appendix B to this report.
1. report highlights
This report has been prepared in accordance with Section 56 of the Pensions Act 1990 at the request of the Trustees by the Fund Actuary on behalf of Mercer. The report presents the results of an actuarial valuation of the Church of Ireland Clergy Pension Fund (“the Fund”) as of 30th September 2000; the effective date of the previous valuation was 30th September 1997.
The last valuation disclosed a surplus of assets over the capitalised value of the liabilities amounting to IR£18.3M on the consolidated balance sheet, in light of which certain improvements to the benefits of the Fund were implemented as follows:-
(1) The Normal Pension Age has been reduced from age 67 to age 65 or the completion of 40 years service
(2) The indexation of the deferred pensions accrued prior to 1st January 1985
(3) Pensions for “pre-1976” widows increased to 62.5% of normal pension
(4) All Widows’ Pensions, current and prospective were increased by 20%
The principal purposes of the valuation are to
· compare the value of the Fund’s assets with the value of its accrued liabilities at the valuation date,
· recommend an appropriate future contribution rate to finance the Fund’s expected future liabilities, and
· determine whether the Fund satisfied the minimum funding standard provided for in the Pensions Act 1990 at the valuation date.
From the valuation results summarised later in this report:
·
On the assumption that the Fund continues, the assessed
value of the assets at the valuation date represented 103% of the Fund’s
accrued liabilities at that date based on
projected final stipends. [The funding
objective is a percentage of 100%.]
· The valuation disclosed that an aggregate surplus exists in each sub-division (taking account of both investments and future contributions), of IR£5,855,000 in the Republic and Stg£683,000 in Northern Ireland. On the basis of an exchange rate of IR£1.32 to Stg£1, this is equivalent to approximately IR£6,756,000 on the consolidated balance sheet.
· The recommended contribution rate assumes that future annual administrative expenses will equal 4.5% of total contributions.
· In each sub-division the assets were sufficient to cover the accrued liabilities of members based on service up to the valuation date and on estimated final stipends. In the Republic the Fund satisfied the minimum funding standard provided for in the Pensions Act 1990.
· The current contribution rate of 25.8% of minimum approved stipend, with the current additional rates of contribution, are sufficient to provide for the liabilities of the Pension Fund in each sub-division.
· There is scope for the Trustees to consider improving the Plan’s benefits without an increase in the contribution rate currently being paid. The results in Appendix 1.3 show a slight increase in the contribution required of 0.8% if the improvements outlined are implemented. However, in the overall context of the valuation results, this is not significant and the current contribution rate can be maintained until the next actuarial valuation in 2003. At this time, the contribution rate will be reviewed to determine its ongoing suitability.
2. principal valuation results
A summary of principal valuation results from the current valuation, with a brief analysis of the principal factors that have affected these results, follows. Further detail is contained in Appendix 1.
|
Actuarial Valuation as |
Comparison
of Accrued Liability with Value of Assets |
Consolidated Results |
Actuarial Accrued Liability (IR£’000) |
81,256 |
Assessed Value of Assets (IR£’000) |
84,086 |
Surplus of valuation assets over liabilities (IR£’000) |
2,830 |
Funded Ratio (Ongoing Basis) |
103% |
The principal factors which have contributed to the change in the funded ratio (ongoing basis), and the contribution rate, since the previous valuation can be summarised as follows:
·
The actual experience, in the area of investment return
as compared to stipend increases, was more favourable than the valuation assumptions
and therefore contributed to an increase in
the funded ratio and a reduction in the contribution rate.
· The benefit improvements contributed to a reduction in the funded ratio and an increase in the contribution rate.
· The method used at the last valuation was the Attained Age method. We have used the same method in this valuation. A description of this method is included in the report.
3. the assets of the fund
The Fund’s assets are invested in domestic/international equities, bonds, property and cash using external investment managers who invest directly in stocks or via pooled funds that invest in such stocks. From the asset details, I am satisfied that the investment policy being pursued by the trustees is appropriate having regard to the nature of the Fund’s liabilities.
The value of the Fund assets under the control of the investment managers as at 30th September 2000 is as follows:
Republic of Ireland
Sub-division
Bank of Ireland Asset Management: IR£ 44,086,800
Northern Ireland Sub-division
Lazard Brothers Asset Management Limited: Stg£
44,161,900
Allowing for net current assets, the value of the Fund’s
assets, amounted to IR£43,900,700 for the ROI sub-division and Stg£43,901,600
for the NI sub-division, equivalent to approximately IR£101,845,000.
The methodology used to determine the actuarial value of assets, the combined value of which (IR£84,086,000) has been used to calculate the Fund’s ongoing funded ratio and future contribution rate is explained in Appendix 3 along with the details of the calculations. I am satisfied that the method used to value the assets is compatible with the basis used to determine the value of the Fund’s liabilities.
The value of assets used for the purposes of the
actuarial funding certificate under S42 of
the Pensions Act is the market value of the Fund’s assets shown in the
accounts.
4. basis of valuation
Participant Data
The valuation has been
based on the participant data provided by the Board. This is analysed in detail in
Appendix 4 of this Report and can be summarised briefly as follows:
|
Actuarial Valuation as of |
|
Number of Participants in Valuation |
Republic of Ireland |
Northern Ireland |
Active Participants |
200 |
288 |
Participants with Deferred Benefits |
33 |
44 |
Participants Receiving Benefits |
223 |
299 |
Total |
456 |
631 |
Notes:
1. The total of pensions in payment to those participants receiving benefits at the valuation date was IR£1,602,662 for the ROI sub-division and Stg£1,790,220 for the NI sub-division.
Actuarial Cost Methods & Assumptions
The actuarial cost method used, known as the Attained Age Method, is designed to produce a total contribution rate which, in respect of current membership, is expected to remain stable in the future. If the inclusion of new members in the Plan results in the average age of the plan membership remaining stable or reducing, the total contribution rate would be expected to fall over time.
The assumptions used in the liability valuation are set out in detail in Appendix 4. The key financial assumptions used in the ongoing valuation are:
|
Actuarial Valuation |
Investment return |
7.5% p.a. |
Stipend Increases |
5.0% p.a. |
Pension Increases |
5.0% p.a. |
Benefit Revaluation |
5.0% p.a. |
If actual experience differs in the long term from the assumptions made significant variations in the funded ratio and future contribution rates could result. The assumptions to which the Fund’s ongoing funded ratio and future contribution rate are particularly sensitive are the extent to which the rate of investment return exceeds both the rate of future increases in stipends and the rate of pension increase.
Fund Provisions
The benefits being provided under the Fund and upon which this valuation is based are summarised in Appendix 4 of this Report.
ooooOoooo
This Report has been prepared in accordance with the Guidelines of the Society of Actuaries in Ireland.
I shall look forward to discussing the results of this valuation with the Trustees.
James
R Kehoe
Fellow of the Institute of Actuaries 23
February 2001
Appendix 1.1 The actuarial aggregate liability as of the valuation date.
Appendix 1.2 Description of proposed benefit improvements.
Appendix 1.3 The actuarial aggregate liability as of the valuation date allowing for the proposed benefit improvements.
appendix 1.1
Actuarial Aggregate Liability
Based on the assumptions set out in Section 4, the results of the valuation as at 30th September 2000 are as follows:
Balance Sheet in respect of the |
|||
|
Past |
Future |
Total |
1. Liabilities |
IR£’000s |
IR£’000s |
IR£’000s |
a. Active Participants |
|
|
|
Members’ Retirement Pensions |
9,818 |
7,529 |
17,347 |
Spouses’ Pensions on Death in Service |
525 |
736 |
1,261 |
Late Retirement Pensions |
2,395 |
0 |
2,395 |
Lump Sum Benefits |
0 |
735 |
735 |
Total |
12,738 |
9,000 |
21,738 |
b. Participants with Deferred Benefits |
715 |
- |
715 |
c. Participants Receiving Benefits |
16,142 |
- |
16,142 |
Total
Liabilities (a. + b. + c.) |
29,595 |
9,000 |
38,595 |
2. a. Actuarial Value of Assets |
34,085 |
- |
34,085 |
b. Future Contributions |
|
10,365 |
10,365 |
Total
Assets (a. + b.) |
34,085 |
10,365 |
44,450 |
3. Net Actuarial Liability (2 –
1) |
(4,490) |
(1,365) |
(5,855) |
4. Value of a 1% Contribution |
373 |
373 |
373 |
5. Contribution
required |
(12.0%) |
(3.7%) |
(15.7%) |
|
Balance Sheet in respect of the |
||||
|
Past |
Future |
Total |
|
|
1. Liabilities |
Stg£’000s |
Stg£’000s |
Stg£’000s |
|
|
a. Active Participants |
|
|
|
|
|
Members’ Retirement Pensions |
13,137 |
10,279 |
23,416 |
|
|
Spouses’
Pensions on Death in Service |
711 |
696 |
1,407 |
|
|
Late Retirement Pensions |
5,258 |
0 |
5,258 |
|
|
Lump Sum Benefits |
0 |
959 |
959 |
|
|
Total |
19,106 |
11,934 |
31,040 |
|
|
b. Participants with Deferred Benefits |
922 |
- |
922 |
|
|
c. Participants Receiving Benefits |
19,113 |
- |
19,113 |
|
|
Total Liabilities (a. + b.
+ c.) |
39,141 |
11,934 |
51,075 |
|
|
2. a. Actuarial Value of Assets |
37,883 |
- |
37,883 |
|
|
b. Future Contributions |
|
13,875 |
13,875 |
|
|
Total Assets (a. + b.) |
37,883 |
13,875 |
51,758 |
|
|
3. Net Actuarial Liability (2 – 1) |
1,258 |
(1,941) |
(683) |
|
|
4. Value of a 1% Contribution |
521 |
521 |
521 |
|
|
5. Contribution required |
2.4% |
(3.7%) |
(1.3%) |
|
|
|
Balance Sheet in respect of the |
||||
|
Past Service |
Future Service |
Total Service |
|
|
1. Liabilities |
IR£’000s |
IR£’000s |
IR£’000s |
|
|
a. Active Participants |
|
|
|
|
|
Members’ Retirement Pensions |
27,158 |
21,096 |
48,254 |
|
|
Spouses’
Pensions on Death in Service |
1,464 |
1,654 |
3,118 |
|
|
Late Retirement Pensions |
9,334 |
0 |
9,334 |
|
|
Lump Sum Benefits |
0 |
2,001 |
2,001 |
|
|
Total |
37,956 |
24,751 |
62,707 |
|
|
b. Participants with Deferred Benefits |
1,932 |
- |
1,932 |
|
|
c. Participants Receiving Benefits |
41,369 |
- |
41,369 |
|
|
Total Liabilities (a. + b.
+ c.) |
81,257 |
24,751 |
106,008 |
|
|
2. a. Actuarial Value of Assets |
84,086 |
- |
84,086 |
|
|
b. Future Contributions |
|
28,678 |
28,678 |
|
|
Total Assets (a. + b.) |
84,086 |
28,678 |
112,764 |
|
|
3. Net Actuarial Liability (2 – 1) |
(2,830) |
(3,927) |
(6,756) |
|
|
4. Value of a 1% Contribution |
1,061 |
1,061 |
1,061 |
|
|
5. Contribution required |
(2.7%) |
(3.7%) |
(6.4%) |
|
|
appendix 1.2
As requested by the Board, I have also looked at the
impact on the valuation results of
improving the benefits in a number of areas.
These are:
1. Increasing pensions in payment to reflect increases in the Minimum Approved Stipend.
2. Increasing the surviving spouses pension to 66.6%
of the gross pension of a deceased member.
The valuation results allowing for these improvements are set out in Appendix 1.3.
appendix 1.3
Based on the assumptions
set out in Section 4, the results of the valuation as at 30th September 2000, taking in to account the above
benefit improvements, are as follows:
Balance Sheet in respect of the |
|||
|
Past |
Future |
Total |
1. Liabilities |
IR£’000s |
IR£’000s |
IR£’000s |
a. Active Participants |
|
|
|
Members’ Retirement Pensions |
27,650 |
21,486 |
49,136 |
Spouses’ Pensions on Death in Service |
1,627 |
1,838 |
3,465 |
Late Retirement Pensions |
9,517 |
0 |
9,517 |
Lump Sum Benefits |
0 |
2,001 |
2,001 |
Total |
38,794 |
25,325 |
64,119 |
b. Participants with Deferred Benefits |
1,932 |
- |
1,932 |
c. Participants Receiving Benefits |
47,581 |
- |
47,581 |
Total
Liabilities (a. + b. + c.) |
88,307 |
25,325 |
113,632 |
2. a. Actuarial Value of Assets |
84,086 |
- |
84,086 |
b. Future Contributions |
|
28,678 |
28,678 |
Total
Assets (a. + b.) |
84,086 |
28,678 |
112,764 |
3. Net Actuarial Liability (2 –
1) |
4,221 |
(3,353) |
868 |
4. Value of a 1% Contribution |
1,061 |
1,061 |
1,061 |
5. Additional
contribution required |
4.0% |
(3.2%) |
0.8% |
THIS CERTIFICATE HAS BEEN PREPARED UNDER THE PROVISIONS OF SECTION 42 OF THE PENSIONS ACT 1990 (“the ACT”) FOR SUBMISSION TO THE PENSIONS BOARD BY THE TRUSTEES OF THE SCHEME
SCHEME NAME: The Church of Ireland Clergy Pension Fund
SCHEME COMMENCEMENT DATE: 1st January 1976
PENSIONS BOARD REFERENCE NO: PB 1667
EFFECTIVE DATE OF THIS CERTIFICATE: 30th September 2000
EFFECTIVE DATE OF PREVIOUS CERTIFICATE: 30th September 1997
On the basis of information supplied to me and having regard to such financial and other assumptions as I consider to be appropriate I am of the opinion that the resources of the scheme at the effective date of this certificate would have been sufficient if the scheme had been wound up at that date to provide for:-
(a) the liabilities of the scheme determined in accordance with Section
44(a) of the Act,
and
(b) the estimated expenses of administering the
winding up of the scheme.
I therefore certify that as at the effective date of this certificate the scheme satisfies the funding standard provided for in Section 44 of the Act.
Signature: JAMES R KEHOE Date: 23rd February 2001
Name: James R Kehoe Qualification: Fellow
of the Institute of Actuaries
Name of Actuary’s Employer/Firm: Mercer Limited
Appendix 3.1 Summary of Assets
Appendix 3.2 Actuarial Value of Assets
appendix 3.1
Summary of Assets
Below is a summary of the invested assets in respect of each sub-division of the Fund as at 30th September 2000. These details have been taken from the BIAM (in respect of the ROI sub-division) and Lazard Brothers Asset Management Limited (in respect of the NI sub-division) investment reports.
Republic of Ireland
sub-division
Distribution of Assets by Category
|
Equities
|
Fixed Interest
|
Cash
|
Property
|
Index Linked
|
Total
|
% of Fund
|
Irish |
8,979 |
2,834 |
334 |
3,663 |
459 |
16,269 |
37.1% |
Euro (Ex-Ireland) |
5,199 |
3,916 |
1,543 |
0 |
0 |
10,658 |
24.3% |
Other |
15,086 |
2,012 |
(322) |
0 |
198 |
16,974 |
38.6% |
Total |
29,264 |
8,762 |
1,555 |
3,663 |
657 |
43,901 |
100% |
%
of Fund |
66.7% |
20.0% |
3.5% |
8.3% |
1.5% |
100% |
|
|
Equities |
Fixed Interest |
Cash |
Total |
% of Fund |
UK |
25,941 |
7,676 |
1,747 |
35,364 |
80.6% |
Other |
8,538 |
0 |
0 |
8,538 |
19.4% |
Total |
34,479 |
7,676 |
1,747 |
43,902 |
100% |
% of Fund |
78.5% |
17.5% |
4.0% |
100% |
|
appendix 3.2
Actuarial
Value of Assets
In valuing the assets of the Fund, I have considered the present capitalised value of the future investment income arising from the existing assets on a basis consistent with the valuation of the Fund’s liabilities.
The expected future income from the Fund’s portfolio of
equity and fixed income investments has been discounted at the valuation rate
of interest ie 7.5% per annum.
Allowance has been made for dividends on equity investments to increase
in the future at a rate of 5% per annum.
Other investments, and the net current asset of the Fund at the valuation date have been taken into account at their
market valuation.
Following this procedure, I have placed a value of IR£34,085,000 on the assets of the ROI sub-division of the Fund and Stg£37,883,000 of the NI sub-division of the Fund. This represents 77.6% ROI sub-division of the Fund’s assets and 86.3% of the NI sub-division of the Fund’s assets at market value at the valuation date.
This actuarial value is inherently more stable than market values and thus is more appropriate for the long term valuation of the Fund.
Appendix 4.1 The participant data used for the actuarial valuation.
Appendix 4.2 The liability valuation assumptions.
Appendix 4.3 The Fund provisions valued in the actuarial valuation.
appendix 4.1
Fund Participants
Participant details were supplied by the Church and are summarised below.
Active Participants |
Number |
Republic of Ireland |
|
Clergy |
194 |
Episcopal |
6 |
Northern Ireland |
|
Clergy |
283 |
Episcopal |
5 |
Total |
488 |
|
Number |
Annual Pensions |
Participants Receiving Benefits |
|
|
· Republic of Ireland |
223 |
IR£1,603 |
· Northern Ireland |
299 |
Stg£1,790 |
Total |
522 |
|
Participants with Deferred Benefits |
|
|
· Republic of Ireland |
33 |
IR£71 |
· Northern Ireland |
44 |
Stg£99 |
Total |
77 |
|
appendix 4.2
The assumptions used in the liability projections are set out below.
It should be noted that the
results of the valuation are particularly sensitive to the gap assumed between
investment returns and increases in earnings before retirement and between investment returns and pensions in payment after
retirement.
Financial Assumptions |
|
Investment return |
7.5% p.a. for ongoing funding |
Stipend increases |
5.0 % p.a. for ongoing funding |
Pension Increases |
5.0% p.a. for ongoing funding |
Benefit revaluation |
The increasing deferred benefits will revalue in deferment at 5.0% p.a. where applicable. |
In our calculations we have used what we regard as
appropriate rates of mortality both before and after retirement.
We have also assumed that 90% of clergy will be married at retirement
and that husbands will on average be 3 years older than their wives. In addition, all curates are assumed to
retire as incumbents.
appendix
4.3
Summary
of Fund Provisions
The benefits for the
clergy who are members of the Fund and contributions currently payable under
the provisions of Chapter XIV of the Constitution are summarised briefly below.
BENEFITS
The normal retirement
age for incumbents and curates is 65 or the completion of 40 years service.
On retirement at
normal retirement age a member receives a pension calculated as 1/60th of
minimum approved stipend in force at that time, in respect of each year of
service up to a maximum of 40 years.
A member, on
retirement, can elect to receive a portion of his pension up to 25% as an equivalent
lump sum equal to 9 times the amount of pension given up.
On the death of a
pensioner, a widow’s pension of 60% of the member’s full pension entitlement
(before commutation) is payable, but the members pension is paid for a minimum
period of 5 years.
Provision for
additional pension payments in respect of dependent children and orphans are
also included.
On death in service a
pension is payable to a member’s widow equal to 60% of the pension payable to
the member had he remained in service to normal retirement age but based on the
rate of minimum approved stipend at the date of death.
A lump sum is also
payable of four times the rate of minimum approved stipend at the date of
death.
Provision for
dependent children and orphans’ benefits is included.
A member who has
attained the age of 60 and completed two years’ service may retire immediately
and receive reduced retirement benefits.
If a member is forced
to retire as a result of ill health, he is entitled to receive 90% (and in
certain cases, 100%) of the pension which derives from the service he has
completed at his date of retirement based on the rate of minimum approved
stipend in force at that date.
A member who retires
after normal retirement age receives an enhanced pension payable from actual
date of retirement.
On ceasing to be a contributing member of the Fund, a
member having completed two years of service will receive either his accrued pension accumulation in respect of
service to date of leaving, or a transfer to another fund approved by the
appropriate Revenue authority of an amount equal to the value of the pension
accumulation. If he has completed less than two years
service he will receive only a refund of his contributions (see below) to the
fund with interest thereon at 3% per annum or with the Board’s consent the
accrued pension accumulation. In
respect of contributions paid on or after 1st January 1976 the accrued pension
accumulation shall be increased each year up to retirement by the same
percentage as that applied to pensions in course of payment.
Pensions in the
course of payment will increase each year by up to 5% per annum subject to this
not being greater than is acceptable to the relevant Revenue authority.
Bishops and
archbishops receive similar benefits to incumbents/curates and have a normal
retirement age of 65, and are automatically credited with 40 years of service
in respect of that portion of the pension relating to minimum approved
stipend. Additional benefits are based
on the bishop’s (or archbishop’s) actual stipend, being 1/18th of the
additional stipend (over minimum approved stipend) up to a maximum of 12 years,
for each year of Episcopal service.
At the valuation date
the rates of contribution payable to the Fund were:-
·
A basic
contribution of 19.2% of minimum approved stipend of which 4.8% is charged to
members.
·
An additional
contribution of 6.6% of minimum approved stipend provided out of central funds.
·
An additional
contribution payable in respect of bishops.
For one bishop consecrated prior to 1st January 1979 the rate is 8.9% of
stipend. An individually calculated
additional contribution rate is payable for those consecrated after 1st January
1979.
·
An individually
calculated additional contribution is payable in respect of those members over
age 35 on entry to the Fund. A fixed
proportion of this special contribution is charged to the individual member
concerned.
·
Certain members now
make Additional Personal Contributions to increase their pension entitlements
up to the Revenue maxima.
·
Some voluntary
contributors to the pre-1976 Widows and Orphans (Church of Ireland) General
Fund, providing additional reversionary pensions for their widows, elected to
continue their contributions to the Clergy Pension Fund.
The Church of Ireland Clergy Pension Fund was last valued as at 30
September 2000.
The assets of the Fund were sufficient at that date to cover the accrued liabilities in respect of the active members based upon completed service at that date and current stipends, as well as the liabilities for pensions in the course of payment, for the reversionary widows’ pensions and for the deferred pensions in respect of members who have now left. The Fund also satisfied the funding standard required under Section 44 of the Pensions Act 1990 (ROI).
The Valuation furthermore showed that the level of contributions currently being paid into the Fund is adequate to provide for the future accruing liabilities.
Nothing has occurred since the last Valuation which would prevent the above statements from being made at the present time.
The next Valuation is due as at 30 September 2003.
James R Kehoe
Actuary, Mercer
1 March 2001
The Financial Statements of the Clergy Pensions Fund are set out in the
following pages.
Note: The formal Financial Statements are expressed in Irish Pounds for technical reasons. However, the Accounts of the Northern Ireland subdivision are maintained in sterling in which currency the contributions and benefits are also paid. Since the formal Accounts are presented in Irish pounds only, changes in the relationship between Irish Pounds and Sterling, and the realised and unrealised gains or losses which occur as between one year and another may give a misleading impression of the comparative figures.
The following schedule illustrates the equivalent figures in sterling for contributions, investment income and benefits in relation to the Northern Ireland subdivision for 2000 and 1999 as shown in the Financial Statements. It is hoped that this schedule will be helpful in studying the accounts.
|
2000 |
1999 |
|
£’000 |
£’000 |
Contributions |
|
|
- Members - normal |
233 |
213 |
- additional personal |
52 |
63 |
- Dioceses |
744 |
671 |
- Representative Church Body |
505 |
539 |
Investments and Short Term Income |
1,155 |
1,175 |
Pensions to Retired Clergy and Bishops |
1,163 |
1,125 |
Pensions to Widows and Orphans |
646 |
603 |
Commutation of pensions |
65 |
64 |
Death benefits |
10 |
3 |