Charity Benchmarking Report 2019
DB pension funding in the charitable sector
23 Apr 2019
Charities continue to face financial challenges at the moment with fundraising and contracts under pressure, and the need for transparency becoming ever greater.
Layered on top of this is a significant DB burden for many charities, with regulatory pressure to pay off pension deficits more quickly. We’ve analysed the DB pension exposures of the largest 40 charities in England & Wales by income to assess the issues and how charities should respond. These charities have a combined £39bn of reserves and £13bn of annual income, and support aggregate DB liabilities of £9bn.
Some of our key findings are:
The average DB scheme funding level is 86%
The average allocation to growth assets is 52%
18% of charities have a pension surplus
63% of charities have closed their DB scheme to future accrual
How should charities respond to these challenges?
Expect even more regulatory scrutiny
Use security or contingency planning to support your DB cash costs
Consider DB consolidation
If you have any questions about anything covered in our report, please get in touch.
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