Clergy pensions could get earthly boost

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Starting pensions for retired Church of England clergy could be about 13% higher from April 2026 if July’s General Synod agrees to proposals to increase both pensions and minimum stipends. The proposals include a retrospective improvement to the accrual rate.

The request to improve pensions was made at General Synod in February last year, as the real value of both stipends and pensions has fallen significantly amid high inflation in the past few years.   

In addition, steep cuts were made in 2011 to improve the open defined benefit scheme’s sustainability. Among others, pensions were reduced from two-thirds to one half of clergy’s stipend. The proposals to be voted on by General Synod this July would reverse this and treat pensions as if the 2011 change had not happened.  

The funding strain after the global financial crisis also meant the number of years to reach a full pension was extended to 41.5, while the normal retirement age was increased to 68 from 65, and a year’s lag brought in to calculate pensions. The lag year will be abolished under the proposals, and the years needed for a full pension reduced to 40, but the retirement age will remain at 68.  

In summary, the recommendations include: 

 
If adopted in full, including a proposed uplift to the National Minimum Stipend from £28,500 to £32,000, the changes would provide a full clergy pension of more than £20,000 a year in today’s money, in addition to the state pension. The proposals would mean an additional £900m would be paid out to clergy.  

The accrual and benefit changes are what the Church of England Pensions Board said it could offer in response to the request made last year.   

“It's really good to be in a position to be improving benefits," said Maggie Rodger, a trustee of the Pensions Board. “Supporting clergy is what we’re there for.”  

Ian Paul, a member of Archbishops’ Council who brought the motion to Synod last year, called the upcoming vote “fantastic news” and thanked the Pensions Board for their engagement. “This puts right a serious injustice, and I look forward to further review work on the pension and stipend following July Synod,” he added.  

The Church of England Funded Pensions Scheme reached full funding in January 2023. The improvement in funding and the financial conditions mean employer contributions have reduced from around 40% to 22% over the past few years. The scheme has provided inflation uplifts, including discretionary benefits, in recent years, making it part of a minority of schemes who did so. The Pensions Regulator found in 2024 that only 32% of schemes able to make discretionary payments had done so in the previous three years. 

The fund, which is non-contributory for clergy, provides pensions for service accrued from January 1998 onwards. The Church of England Pensions Measures scheme covers service before 1 January 1998 from the Church’s endowment and is the responsibility of the Church Commissioners, though the Church’s Pensions Board administers this scheme.  

Pensions Board chair Clive Mather said the circumstances are now more favourable than they have been over the last 15 years but pointed to ongoing market volatility and financial pressures on the Church.  

“We are approaching such an opportunity gladly but with appropriate caution,” he said.  

Documents by the Board suggest that Responsible Bodies have experienced some financial pressures that need to be taken into account: “We are mindful of feedback from Responsible Bodies over the last two valuations, that they have limited ability to cope with increases to the cost of pensions. We therefore want to minimise the risk of increases again, as happened after the 2008 global financial crisis. This is also why it is important to consider benefit improvements in the round alongside the valuation and triennium funding process.”  

The pension fund is currently undergoing a valuation, but this will be kept open until the vote in July.  

The changes are happening amid a wider governance review affecting the central bodies of the Church. The Church of England’s highest post, the Archbishop of Canterbury, is currently vacant following the resignation of Justin Welby over his inaction on abuse allegations against barrister John Smyth, who was involved with the Church. A successor is not expected to be named before autumn.

   
   
       
   

Should more employers and trustees consider benefit increases?

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