After a successful campaign from Clergy Pension Action, the Church of England has this morning announced proposed major improvements to the Clergy pension scheme.

In a press release today, the Church has announced proposals to restore the target pension level to two-thirds of pensionable stipend, and to also increase active pension that have come into payment since 2011. General Synod will be asked to consider these proposals, which will require changes to the scheme rules, this July, with potential implementation after April 2026.

Ian Paul, a member of the Archbishops’ Council and a key Synod campaigner on this issue, noted the key role played by Clergy Pension Action in this development. “It is the fruit of many years of campaigning, and I am grateful both to the Clergy Pension Action team, and to John Ball and Clive Mather, of the Church of England Pensions Board, for their hard work and their positive engagement.”

You can read the full press statement here and below.

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PRESS STATEMENT

A major step in a significant package of proposals for clergy well-being is announced today, which if implemented will increase future pension benefits for existing and future pensioners.

The improvements are being proposed by the Archbishops’ Council, based on analysis by the Church of England Pensions Board. They include restoring the target pension level to two-thirds of pensionable stipend, coupled with an increase to pensions that have come into payment since 2011. General Synod will be asked to consider these proposals, which will require changes to the scheme rules, this July, with potential implementation after April 2026.

Further work is also underway to increase support and choice for clergy retirement housing, including measures to help clergy get on the housing ladder during stipendiary ministry. There is also ongoing work on proposals to increase stipends and significantly improve the maintenance support for ordinands. The detail of these additional measures will be announced in the coming weeks.

Pensions improvements

The Archbishops’ Council, drawing on analysis prepared by the Church of England Pension Board, is bringing the proposed improvements to the Church of England Funded Pensions Scheme (CEFPS) to Synod in July, following the February 2024 General Synod motion.

The proposals aim significantly to enhance retirement security of clergy, restoring pension levels and addressing long-standing concerns about post-2011 service benefits.

Key recommendations include:

• Restoring the target pension level to two-thirds of pensionable stipend for future service.
• Changing the reference stipend used to calculate pensions at commencement by removing the ‘one-year lag’. This would provide a boost to all pensions coming into payment.
• Uplifting benefits for active and deferred members to reflect a two-thirds accrual rate since 2011.
• Providing an increase to pensions that have come into payment since 2011.

If adopted in full (including the proposed uplift to the National Minimum Stipend), these improvements would provide a full clergy pension after 40 years in excess of £20,000 per annum in today’s money, which together with a full state pension would give an income in retirement in excess of £32,000 per annum. The proposals would mean that an additional £900 million would be paid out to clergy during their retirement.

In addition, further support for clergy retirement housing will be announced in the coming weeks that builds upon the Enabling Choice discussions from last year.

The Rev Dr Ian Paul, a member of Archbishops’ Council who brought the motion to Synod last year which initiated a review of clergy pensions, said: “This is fantastic news, which I hope will be of great encouragement to all serving and retired clergy.

“It is the fruit of many years of campaigning, and I am grateful both to the Clergy Pension Action team, and to John Ball and Clive Mather, of the Church of England Pensions Board, for their hard work and their positive engagement.

“This puts right a serious injustice, and I look forward to further review work on the pension and stipend following July Synod.”

Archbishops’ Council member, the Ven Dr Miranda Threlfall-Holmes, said: “This set of proposals will come as a huge relief to clergy and pensioners.

“Nobody is in ministry for the pay, but the covenant the Church makes with clergy is that they should be freed by the stipend from financial stress. In recent years this covenant has been straining at the seams, and thousands of clergy have been asking for the restoration of the historic two-thirds pension, which this package now effectively provides.

“I hope they feel heard today, and I pray that Synod will approve these proposals whole-heartedly in July, so that we can begin to increase pensions already in payment as soon as is possible.”

Carl Hughes, chair of the Archbishops’ Council Finance Committee said: “This announcement is part of a package which, if approved, will represent a sea change both in clergy well-being and as to the wider programme of simplification of the national church finances.

“I hope that these proposed pensions changes will give clergy greater clarity as to the provision for the future but also considerable reassurance as to the level of funding that they will receive and the standard of living that they can expect in retirement.”

These improvements build on the significantly improved funding position in the CEFPS and respond to the February 2024 General Synod motion.

The Archbishops’ Council, acting on the analysis provided by the Pensions Board, sees the proposed package as the best way of getting more pension to people as quickly as possible.

The enhancements to clergy pensions are part of a wider clergy well-being package which is currently being finalised. It comes on top of a £2 million grant to the Clergy Support Trust and recent above-inflation stipend increases to catch up on previous years.