Anglican priests in England will debate the future of their pension provision at a February meeting of the Church of England General Synod in London.
To reduce underfunding, members of the Church of England Funded Pension Scheme will have to consider measures such as raising contributions, lowering benefits or even closing the pension plan to new members, according to a report published by the church in mid-2006.
Employer contributions may have to rise to as high as 50% of salaries from 33.8% currently to plug the deficit, following funding regulations issued last year by new U.K. pension regulator. The change is likely to be sensitive, as the church and its pension contributions are mainly funded by donations to parishes from individuals.
Total assets of the pension plan were £380 million as of Dec. 31, 2005, according to the latest data published by the Church of England. At that time, the deficit was estimated at £125 million, according to a report by actuaries Lane, Clarke & Peacock. LCP is updating the valuation of the pension plan, which could put underfunding at more than £140 million, as a result of recent changes in mortality rates, the report said.
Church of England spokesman Lou Henderson said pension executives would not comment before the Synod meeting next month. All the plan's assets are invested in equities managed by UBS Global Asset Management and GMO U.K. Ltd.