The National Trust yesterday announced that it is to close its defined benefit pension scheme to future accrual as of 31 March 2016, following negotiations with its trade union.
The announcement follows formal negotiations which started in March of this year, and the closure of the scheme to new entrants in 2003. The National Trust expects the proposed changes to impact around 1,200 members of staff, or approximately 16 per cent of its permanent workforce.
Defined benefit pensions promise a set level of pay to retirees. Most charities have closed schemes to new members, but more are closing their schemes to more payments from existing members.
The charity launched a 60-day consultation of the scheme and negotiated with the Trust’s recognised trade union Prospect.
The closure is the result of the most recent valuation of the scheme in April 2014 which showed a deficit of £116m, which had increased substantially from £69m in its last three-year valuation in 2011.
The charity said back in March that it was making these proposals because it felt it could no longer “sustain the level of cost and risk associated with providing a defined benefit pension scheme without it impacting on our ability to fulfil our core purpose of looking after thousands of special places on behalf of the nation forever, for everyone.”
The Trust has said it has taken “a number of steps to mitigate the potential impact on members of staff”, including delaying implementation until next year and deciding not to remove the link with the final salary.
It also says that following feedback it received during consultation, it has also made “positive changes” to its original proposals for death-in-service and ill-health benefits from 31 March 2016.
On closure of the scheme, members of staff will be eligible to join 2,500 colleagues in its defined contribution pension scheme, where the Trust will match any contributions members of staff make between 4 per cent and 10 per cent.
The Trust has added that in order to safeguard accrued benefits, it has agreed with pension scheme trustees to significantly increase its deficit recovery payments from £3m a year not to £8.5m a year from 2016.
