2024 Charity Defined Benefit Pensions Benchmarking Report

Blog 19 Mar 2024 By Alistair Russell-Smith

Most charity DB schemes are now fully funded on FRS102 and Technical Provisions – the average FRS102 funding level in our survey is 104%. 

Focus therefore needs to turn to endgame planning. Timing for this is good with a wider array of options now coming to market. Newly emerging consolidators, (including DWP’s proposal for a public sector consolidator by 2026), should also be assessed.

Insurance buy-out is still likely to be appropriate for most, but running on (or deferring buy-out) may make sense for some charities. These charities could then access surplus from their schemes over time, bearing in mind that charities are also exempt from the 25% tax charge on surplus refunds. Turning their DB scheme from a liability to an asset.

26% of charities are no longer paying deficit contributions, and this will rise as recovery plans draw to an end. Charities’ focus will then turn to other ways to reduce cost and simplify governance.

Running costs in our analysis average £450,000 a year. In our experience schemes can reduce running costs by 30% by streamlining approach and maximising use of automation and technology.

Contact Alistair Russell-Smith to discuss benchmarking your scheme and collecting more detailed analysis. Or, we can explore endgame options and ways to reduce running costs for your DB scheme. 

Alistair Russell-Smith

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