General Synod pension plan changes will cost more, pay less

Published by
Leigh Anne Williams

The pension fund for staff of the Anglican Church of Canada, including clergy across the country, is going to cost more and return less in the coming year.The Council of General Synod (CoGS), which met in November, has approved changes to the General Synod Pension Plan that will increase the employer contribution paid by the dioceses and reduce the amount of pension earned each year by plan members.The employer contribution will be increased to 11.2% of pensionable earnings in 2010 and up to 12.4% in 2011. Judy Robinson, Director of Pensions, said that employer contributions from dioceses across the country in 2008 were about $10.2 million. In 2010, “they are going up 10%, so that’s just over $1 million,” she said. The increase for 2011 will be similar, another 1.2%.On the payout side, the amount of pension earned for members will be reduced from 2% to 1.8% of pensionable earnings. “The pension an employee earns next year will be 10% less than the pension they earned this year,” Robinson explained. It is important to note, she added, that this reduction does not affect what members have earned previously, only what will be earned from now on.The pension plan changes were necessary to offset asset losses resulting from the ongoing financial market crisis, said Robinson. “Our pension plan, along with most others, has lost some value of its assets. We’ve recovered a lot of that in the last seven or eight months, but we’re still not back to where we were.”The changes also address the fact that the average age of the approximately 2,000 plan members is increasing. In most pension plans, the natural aging of the population is offset by the entry of younger, newly hired employees, explained Robinson. In the church, however, many new employees start later in life, after making a midlife career change. As a result, the average age of members in the General Synod Plan has been steadily increasing and is now 51.9 years. That’s about 10 years older than the average age of employees in many other pension plans. “The older the average employee population is, the more it costs to provide the pensions earned by the members,” said Robinson.Although the pension amount earned by employees has been 2 per cent of pensionable earnings since 1997, it has been lower in the past and was increased gradually as finances allowed, noted Robinson. Hopefully, this will be possible again in the future, she added.

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Published by
Leigh Anne Williams