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U.K. churchgoers asked to plug pension gap

The Church of England pension scheme which covers clergy in the UK is currently valued at around £500 million but more importantly has a deficit of £350 million on its long-term liabilities. It has been revealed that the pension scheme moved lock stock and barrel into the equity market with 100% exposure prior to the crash of 2007. It is unknown why the fund was so aggressive in the equity market when you bear in mind that many traditional pension schemes were more than happy to have a 50% equity split with fixed interest and money market instruments.

The problem now is that local parishes and churchgoers around the UK will be asked to dig deep to try and plug the gap in the church's pension scheme. Quite how the Church of England will be able to raise sufficient funds in the short to medium term remains to be seen because we are talking about a significant liability that could, in a worst-case scenario, cause significant problems. It is believed that the Bank of England is considering a number of alternatives which include raising the pension age and lowering the rate at which benefits will accrue for younger clergy.

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