Pensions Trust members face Bridge Trustees deficit hit
Employers in the charity sector face significant shortfalls in what they had previously believed were defined contribution (DC) schemes, as a result of the Bridge Trustees ruling.
In anticipation of retrospective legislation from the Department of Work & Pensions (DWP) in light of the case, trustees of the Pensions Trust’s (TPT’s) Growth Plan Section 3 (S3) have informed employers it will become a defined benefit (DB) arrangement.
These join 1,100 TPT members already liable for deficits in the trust's DB plans.
And the deficit facing S3 members is calculated from sections one and two of the Growth Plan, both DB in structure.
At the last valuation in September 2008, the plan had a 96% funding level and was running a deficit of £28.6m against liabilities of £770.6m.
This may affect hundreds of employers, admitted TPT chief executive Stephen Nichols, with approximately 1,100 employers already liable for deficits in other sections of the trust.
Nichols told PW: “From our understanding of the pensions bill, our employers need to be aware there may be some unfortunate consequences.”
The existing Growth Plan recovery strategy proposes the deficit could be eliminated through investment returns over a period of nine years and 10 months without the need for additional contributions.
The plan is currently undergoing valuation and considerable growth of the deficit is anticipated.
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