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Clergy Pensions Measure

Volume 530: debated on Monday 19 July 1954

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10.1 p.m.

I beg to move,

That the Clergy Pensions Measure, 1954, passed by the National Assembly of the Church of England, be presented to Her Majesty for Her Royal Assent in the form in which the said Measure was laid before Parliament.
This Measure marks another stage in the campaign to improve the financial position of the clergy. Its object is, quite simply, to provide immediately for better pensions for those who have already retired, for those who retire in future, and, with effect from next year, to relieve those who are still working off the burden of contributing to the cost of their pensions. Dealing as it does with a complicated subject, the wording of the Measure is, I am afraid, rather involved because it improves pensions and abolishes contributions within the framework of the existing law.

Details of the Measure and of the past history leading up to it are fully explained in the comments and explanations of the Legislative Committee which are attached to the Report of the Ecclesiastical Committee, but it may be helpful if I refer to the main points. Until 1927 no clergyman had a pension as of right. In some cases, by a rather elaborate process, he could obtain a charge upon the income of the benefice from which he retired; which meant that so long as he lived his successor's income was accordingly reduced. That, I think hon. Members will agree, was not at all a satisfactory position.

The Ecclesiastical Commissioners also had power to make grants in certain cases amounting to £75 a year, and, in addition, there was a voluntary society known as the Clergy Pensions Institution which by 1926 was able to provide an annuity of £1 a week in return for a small annual contribution. The Clergy Pensions Measure, 1926, created the Clergy Pensions Board to administer a scheme under which clergymen of 55 at that date compulsorily contributed 3 per cent. of their income in order to receive a pension of £200 a year at the age of 70 and after completing 40 years of service. The scheme also provided for proportionately less amounts to be paid for less than 40 years' service and for early retirement on the grounds of ill-health. The position of those over 55 in 1926 remained unchanged until 1930, and no provision could be made for the widows and dependants until 1936. The Pensions Board have power to establish charitable funds to be supported by gifts and legacies so that grants could be made to pensioners in need.

All the various pension Measures were consolidated in 1948 and contributors were divided into two classes. The first of these, the existing contributors, continued to pay 3 per cent. of their income towards their own pension, and to make separate provision for their wives and dependants. But the new class, those who were ordained during and after 1948, paid a consolidated contribution of 5 per cent. of their income to provide pensions both for themselves and their widows and children. In 1952 as a result of actuarial revaluation, the amount of the pensions payable to the first class was increased to £210, and future pensions to the second class were guaranteed at £235.

The new Measure achieves its object by, firstly, transferring most of the assets of the Clergy Pensions Fund, created originally in 1926, from the Pensions Board to the General Fund of the Church Commissioners; secondly, by increasing the basic pension for all clergymen who have completed 40 years' service at the age of 70 to £260; thirdly, by giving power to make a supplement to the £260 in any case so as to bring it up to £300 a year, and by imposing a duty to pay that supplement in every case where either the clergyman will never receive the National Insurance pension or during the period before he receives it; fourthly, by providing that from 1955 onwards no contributions shall be paid by the clergy in respect of their own pensions.

The pensions at the increased rate will be paid to those now in retirement, with effect from 1st April of this year. The position with regard to widows and dependants remains unchanged. The clergy will continue to be liable for a small contribution towards the pensions of these people, namely, the dependants.

The scheme is made possible by two things: the transfer of the assets of the Clergy Pensions Fund to the General Fund of the Church Commissioners, and an increased annual allocation of income by the Commissioners. The assets of the Pensions Fund to be transferred to the Commissioners are estimated to produce £320,000 per annum. The Commissioners are already contributing about £200,000 per annum to the scheme, and now find themselves in a position to provide a further sum of £330,000 a year of new money.

It is estimated, therefore, that the total of £850,000 per year so provided will be fully sufficient to cover all the liabilities of the Commissioners under the Measure. While the Commissioners are responsible for finance and for the exercise of financial control, the Pensions Board will continue to administer the scheme and will remain entirely responsible for the pensions of widows and dependants and for the charitable funds which will continue to provide for special cases of hardship.

This Measure passed through the Church Assembly without a division and, in fact, occasioned very little debate. Only one Amendment was made and that was put down by the members in charge. It has been favourably reported upon by the Ecclesiastical Committee and I trust that the House will have no difficulty in passing this Motion.

Question put, and agreed to.