As a trustee/director of the MMPS I hope I can give guidance
This is not a temporary problem due to the value of investments due to
covid, whilst part of the reason for the Conference decison, it is not
the whole one.
This is a note I sent to another minister:
In once sense this deficit hasn't come as a surprise; in 2009 the
Conference established a Pension Reserve Fund (PRF) (currently over
£36m), that comes from 45% of property levies. This is used to top up
payments to the MMPS and the lay employees' scheme rather than increase
contributions from circuits or ministers.
The PRF can meet the current deficit, but the trustees need to be
assured that going forward the Church has ringfenced funds available and
the balance in the PRF will be sufficient for potential future deficits.
The Pension Regulator has recently changed its advice to pension fund
trustees to make sure that the long-term deficit on the pension funds is
reduced over time. This means that the investments need to be less
risky, to avoid some of the volatility of the stock market, but less
risky assets produce lower returns, so the value of the fund will not
increase in the same way as before.
When the actuary produces the triennial valuation there are a a large
number of factors to take into account - she presents these to the
trustees and we decide which values to use, based on her advice.
Obviously the Connexion has to provide some info like an estimate of
probationers each year
e.g
future increase in stipend
number of new members to the scheme
number of ministers retiring each year
proportion of newly retired who will take a lump sum
mortality rates before and after retirement
proportion of scheme members with a spouse or other dependents
future inflation
future investment returns
longevity of scheme members - based on past experience and actuarial
tables relating to different professional groups
There are other factors but these come to mind!
So to answer your question, the triennial valuation effectively does do
modelling, its purpose is to ensure that the assets of the scheme are
sufficient to pay the pensions of current retired members and the future
benefits of members like you and me
---
Rev Eleanor Smith
Staffordshire Moorlands Methodist Circuit
01782 503228
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On 2021-09-17 09:56, Rob Weir wrote:
Hi to all,
There's plenty of conversation about what's been suggested, and some
resources have been made available. What I'm picking up is that in some
ways there's some bad luck at play here - every three years an Actuarial
Valuation of the scheme has to be done, by law, to see if three are
sufficient resources in the scheme to fund future liabilities - ie pay
everyone their pensions when due. This one was done when, due to Covid, the
Stock Market was in something of a slump and therefore the investments made
by the fund were lower than the Actuary was comfortable with. However, the
Methodist Church is still required to demonstrate how it will meet any
shortfall, hence the request for the 15%. It doesn't get paid straight into
the scheme, but into a fund to pay into the scheme if needed. The problem
with this is, once that fund is there, it is effectively up to the
Connexion to decide how it is allocated if it turns out not to be needed -
as we are being lead to believe this is a temporary situation it may not be
needed, and we're facing the fact that there is much suspicion in churches
and circuits about what Connexion will do with it - it's a fairly safe bet
it won't just be refunded to those who gave it!
This is probably the root cause for many in opposition to it though. The
implication seems to be it's not needed as such, because markets are
recovering and so will the value of the Pension Fund; but then, why even
ask for this?
It puts many of us in an invidious position in my opinion. This is our
pensions we're talking about, so we have a clear conflict of interest if
we're encouraging churches and circuits to pay it; at the same time, we're
also going to see how little some value us (and particularly
supernumeraries) by regarding this as a "waste of money" as I'm sure some
will. We as Ministers are often told we have this Covenant Relationship
with the Methodist Church - so aren't we worth our keep? "They" don't seem
to see that is part of the implication when they won't engage on the PRF at
all.
God Bless
Rob
On Thu, 16 Sept 2021 at 20:43, Sharon thraves <shazjtp@xxxxxxxxx> wrote:
Sharon thraves <shazjtp@xxxxxxxxx>
8:18 PM (23 minutes ago)
Hello All
I wondered if any of you had any wisdom to share regarding the
recommendation from Conference regarding churches helping out the Methodist
Ministers Pension Scheme.
Some loud voices in my Circuit have made it clear they do not support this
and will be proposing the Circuit meeting refuses to help. Their claim is
that this decision will in no way jeopardize the Methodist Pensions.
I don't really know anything about pensions, so I can't reply with any
authority, but I can't help thinking it must do - otherwise they wouldn't
be asking and also that to refuse help will make Ministers in the Circuit
(of whom thre are many Supernumaries the Circuit couldn't function without)
feel undervalued.
I'd value your thoughts.
Sharon Thraves
North Norfolk Circuit
