The National Trust has today (Monday 9 March 2015) begun formal negotiations on the proposed closure of its defined pension scheme to future accrual on 31 March 2016.
Consultation on the closure of the National Trust Retirement and Death Benefits Scheme will last for 60 days, to ensure staff have plenty of time to contribute their views. Negotiations will be made through the Trust’s recognised trade union Prospect.
Following our most recent valuation it is likely that the scheme will show a deficit of £116m (as at 5 April 2014).
This increased from £69m since our last three-year valuation in 2011. We have therefore agreed in principle with the pension scheme trustees to significantly increase our deficit recovery payments from £3m a year now to £8.5m a year from 2016. This will increase by CPI+1% year on year until 2029.
We have maintained the scheme for as long as possible through good financial management. However, we have made these proposals now because we feel we can 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 defined benefit scheme closed to new entrants in 2003 and therefore the proposed changes would impact around 1,200 members of staff or approximately 16% of our permanent workforce.
Should the proposals be adopted, members of staff would join 2,500 colleagues in our defined contributions scheme from 1 April 2016. In this scheme we would match any contributions they make between 4% and 10%. We feel this represents a good pension scheme for a charity and would ensure greater parity of benefit across our whole workforce.
These proposed changes do not impact on the benefits of existing pensioners or deferred members of the defined benefit scheme.
The decision to make these proposals has not been easy and one which we have deliberated over for some time. However, we believe that the steps we are proposing to take will not only secure employees’ accrued benefits but also provide greater financial stability for the Trust in the long term.