Possible financial "Time Bomb" for groups employing staff

Haarlem

Received from an organisation that supports charities and voluntary groups

This is for any group with staff enrolled in a local authority pension scheme or similar arrangement. Those of you who read Third Sector Magazine may have read articles about this recently. In short, these pension funds have big deficits. It can have very nasty consequences for your group.

The amount you have to pay is likely to go up a lot this year. Remember, this amount is set by the fund managers, not by you.

If your organisation closes or you make redundancies, there is almost certainly going to be a large bill to pay to cover the deficit.
If your organisation is an unincorporated association, this liability may well fall on the trustees. It's very nasty.

Remember that if you win a new tender and take on ex-local authority staff under 'tupe', you may be taking on big pension commitments.
Lots of organisations are in this situation. We suggest that if any of this concerns you, you should talk to your pension providers, read up about the issues and maybe even seek professional advice.

To understand what actual pensions liability groups may have relating to closure or redundancy situations, not just for current employees but also any previous employees who were in the scheme, and enquires have to be made via the local authority pension fund Actuary. One group recently was told that they would have to pay a fee of around £2000 to the Actuary simply to find out this liability!