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Half of associations do not have plan for increased pension deficit, survey says
More than 50% of housing associations have no policy in place on how to deal with an increase in pension deficit contributions, a new survey has revealed.
The Social Housing Pension Scheme (SHPS) underwent is triennial valuation last year, with the results set to be released in the coming months.
Previous valuations have seen the deficit on the scheme rise, with housing association members expected to pay higher contributions to reduce it as a result.
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Many have responded by closing ‘defined benefit’ pension schemes – which pay a fixed salary on retirement – with ‘defined contribution’ schemes where the final payments depend on how much is put in and how well the investments perform.
A survey published today by pension consultancy XPS Pensions Group of housing associations with 7,500 SHPS members showed 50% do not yet have a policy in place for dealing with a rise in contributions.
Despite the closure of many defined benefit schemes, one quarter of the respondents still provide new employees with the option of choosing between a defined benefit or contribution based pension arrangement, the survey found.
It also showed only 45% have an existing workplace policy for what action to take if the valuation does result in increased contributions to reducing the deficit.
“Those that do not have a policy in place will first have to consider how to spread any contributions increases and communicate this with members before they can implement their planned action,” the survey said.
Several housing associations have left the SHPS scheme recently. Clarion, the UK’s largest housing association, announced its departure in January.
