Ecclesiastical Committee Two-Hundred and Seventeenth Report


Supplementary comments and explanations on the re-submission of the Church of England (Pensions) Measure

PART I: GENERAL COMMENTS

  1.  The General Synod having referred the revised Measure entitled the Church of England (Pensions) Measure ("the Measure") to the Legislative Committee, the Legislative Committee has the honour to submit the revised Measure to the Ecclesiastical Committee.

THE ECCLESIASTICAL COMMITTEE'S CONSIDERATION OF THE ORIGINAL MEASURE

  2.  Following the submission of the Measure in its original form by the Legislative Committee to the Ecclesiastical Committee on 20 February 2002, the Ecclesiastical Committee considered the Measure at a meeting on 22 April 2002, when it took evidence from the Reverend Dr Richard Turnbull (Chairman of the Steering Committee for the Measure), Mrs April Alexander (a member of the Steering Committee), Mr Howell Harris Hughes (Secretary to the Church Commissioners) and Mr Stephen Slack (Chief Legal Adviser).

  3.  The Ecclesiastical Committee's concern, which prevented it from finding the Measure expedient at its April meeting, related solely to clause 5 of the Measure, which was intended to replace section 7 of the Pensions Measure 1997.

  4.  This new provision will extend for a further period of seven years the Church Commissioners' power to spend capital to meet their pensions liabilities. In the form in which it was originally drafted, it would also have provided for the possibility of further extensions of the power for successive periods of seven years (without limit of number). Those further extensions would have been achieved by Orders made by the Commissioners. Any such Order would have had to be laid before Synod for approval (the "deeming" procedure under Standing Order 69 not being available) and then laid before Parliament as a statutory instrument under the `negative resolution' procedure.

  5.  In his letter of 3 May, the Clerk to the Ecclesiastical Committee wrote that "the Committee were opposed to the extension of the period allowed by inserted subsections (1) and (2) otherwise than by further Measure" and that "the Committee would find the Measure expedient provided that the Order making provisions set out in clause 5 were removed".

THE LEGISLATIVE COMMITTEE'S WITHDRAWAL OF THE MEASURE

  6.  The Legislative Committee met on 14 May 2002 to consider the options available to it and after discussion resolved to withdraw the Measure from the Ecclesiastical Committee and seek its re-introduction into the Synod with a recommendation that clause 5 be amended to remove the power to extend by Order the Commissioners' power to spend capital to meet pension liabilities. The Measure was accordingly withdrawn on the 14 May 2002.

  7.  In reaching this decision the Legislative Committee noted that the Ecclesiastical Committee's position was apparently based upon Parliament's wish to retain control over the application of the Commissioners' capital funds, because of the origin of at least some of those funds.

  8.  The Legislative Committee also noted that the precise mechanism for securing Parliamentary approval over the exercise of the power had never been a matter of principle to the Church. When the Measure was being drawn up the issue of the extension of the power by Order beyond the initial seven year period allowed by the Measure was appreciated to be one of sensitivity and importance—as demonstrated by the decision that the deeming procedure should not be available to secure Synodical approval of any proposed Order. The choice of the particular mechanism proposed in the draft Measure—that of an Order subject to the negative resolution procedure—was influenced by the belief that, having reaffirmed the principle of spending capital, which it had initially approved in the 1997 Measure, Parliament would not expect a substantial involvement in decisions about the future extension of the power.

  9.  In the event, this approach had plainly not commended itself to the Ecclesiastical Committee. But the adoption of the approach of extending the power by Order did not represent a policy position on the part of the Church; and had it been possible to gauge the Ecclesiastical Committee's views earlier when the Measure was being drafted, proper account would have been taken of them. The Legislative Committee did not therefore see any objection in principle to accepting the Ecclesiastical Committee's views at this stage.

  10.  Both the Church Commissioners and the Church of England Pensions Board supported the withdrawal of the Measure and its amendment to meet the Ecclesiastical Committee's concern—the overriding objective of the Commissioners being to obtain a renewal of their power to spend capital, for at least a further period of seven years. Indeed, the Commissioners' long-term financial calculations have been made on the basis that they will have power to spend capital over a much longer period than the next seven years. However, in the light of the Ecclesiastical Committee's expressed concern, the Commissioners accepted that achieving that objective will require primary legislation in the future, as well as at present.

AMENDMENT TO CLAUSE 1

  11.  Subsequent to the Legislative Committee's withdrawal of the Measure, Lord Brightman raised a number of points on the drafting of the Measure. Following correspondence with the Chief Legal Adviser to the General Synod, Lord Brightman was satisfied on all but one point.

  12.  The outstanding point was, in substance, that clause 1 of the Measure was defective in not providing expressly that the purposes specified in clause 1(2) are the only purposes for which the General Purposes Fund of the Pensions Board will in future be applicable.

  13.  The Chief Legal Adviser, Standing Counsel to the General Synod and the Secretary to the Pensions Board accordingly met Lord Lloyd and Lord Brightman on 11 June 2002 to discuss this issue. Standing Counsel explained why clause 1 was drafted in the way it is, which was partly to reflect corresponding provisions in existing legislation. He also explained that, whilst clause 1(4) uses ostensibly permissive language (". . . the Board may at their discretion apply the Fund or any part thereof for any of the purposes set out in subsection (2) above . . ."), when clause 1 is read as a whole, and in the light of clause 2, it is plain that it does in fact represent an exhaustive description of the purposes of the General Purposes Fund. Lord Brightman was, however, unable to accept this analysis.

  14.  The Legislative Committee subsequently resolved that if the Synod agreed to the re-introduction of the Measure, then an amendment to clause 1 would be moved on behalf of the Committee (in a form that Lord Brightman confirmed would fully meet the point at issue). In taking this decision the Committee noted the advice of the Chief Legal Adviser and Standing Counsel that in their view this amendment was unnecessary. However the Committee agreed with the further advice given to it by these legal officers that it would be prudent to make this amendment and thereby avoid the possibility of further delay and difficulty when the Measure was re-submitted to the Ecclesiastical Committee.

SYNODICAL CONSIDERATION OF THE MEASURE

  15.  At the July 2002 Group of Sessions, the Synod carried a motion to re-introduce the Measure.

  16.  The following amendments to the Measure were then made by the Synod:

    (a)  To add the following sub-clause at the end of clause 1:

      "(5)  The purposes set out in subsection (2) above shall replace the purposes for which the Fund was held immediately before the date of the coming into force of this section.".

    (b)  In the new section 7(2) of the Pensions Measure 1997 to be inserted by clause 5, that the words from "(unless" to "below)" be omitted.

    (c)  In the new section 7 of the Pensions Measure 1997 to be inserted by clause 5, that subsections (3) to (6) be omitted and subsection (7) be renumbered as subsection (3).

  The first of these amendments of course addressed the concern of Lord Brightman on the drafting of clause 1.  The second and third addressed the Ecclesiastical Committee's concern regarding the mechanism for securing further extensions of the Commissioners' power to resort to capital to defray their pensions liabilities.

  17.  The Measure was given Final Approval on a division by Houses. The voting figures were as follows:
AyesNoes
Bishops 250
Clergy1310
Laity1700

PART II—NOTES ON REVISED CLAUSES

  The Measure now before the Ecclesiastical Committee is as set out in the Notes on Clauses in the original Comments and Explanations dated 4 January 2002 (attached as an appendix for ease of reference), except that a reference to the new sub-clause 1(5) has been inserted in paragraph 4 (shown in italics) and the notes on the original clause 5 have been amended to delete references to the power for the Commissioners to make an Order extending the period during which they may spend capital to defray their pensions liabilities.

CONCLUSION

  The Legislative Committee hopes that the Ecclesiastical Committee will now be able to issue a favourable report on the Measure, but in the event of the Ecclesiastical Committee requiring any further information or explanation the Legislative Committee stands ready to provide this.

  On behalf of the Committee

Brian McHenry

Deputy Chairman

24 July 2002

APPENDIX

Clauses 1 and 2

  1.  Three discretionary funds in the trusteeship of the Pensions Board are continued or established by sections 19, 20 and 28 of the Clergy Pensions Measure 1961 ("the 1961 Measure"). These empower the Pensions Board to use those funds for assistance with housing or "relief of poverty" for specific categories of beneficiary.

  2.  By the mid 1970s, it had become apparent that the Pensions Board would be better placed to give discretionary help to those retired from stipendiary ministry, or widows and other dependants of those who had served in the ministry, if there were a single fund covering all the classes of beneficiary. Such a Fund—the General Purposes Fund—was thus established by a Resolution of the Pensions Board.

  3.  In order to maximise its flexibility in giving discretionary support, the Pensions Board's fund-raising has focused on the General Purposes Fund. Having regard to subsequent changes in ministry, the Pensions Board now feels that flexibility would be enhanced if the four discretionary funds were amalgamated into a single General Purposes Fund. There would also be consequential savings in administrative costs. As the amalgamation can be achieved by Church legislation, no Charity Commission Scheme is needed to give effect to the proposal. The Commission has, however, been consulted informally and raised no objection to what is proposed.

  4.  Clause 1 of the Measure gives statutory recognition to the General Purposes Fund. It goes on to provide for it to be able both to receive gifts made for purposes corresponding to those of the three funds described in sections 19, 20 and 28 of the 1961 Measure and to apply funds for those purposes. Sub-clause (5) is included to make it clear, for the avoidance of doubt, that the purposes declared in sub-clause (2) represent an exhaustive description of the purposes of the General Purposes Fund.

  5.  Clause 2 provides for the three funds to be wound up and their assets to be transferred to the General Purposes Fund. It also allows for a continuation of existing arrangements enabling dioceses to channel discretionary assistance to individuals through the Pensions Board and the centrally administered pensions payroll.

Clause 3

  6.  The Pensions Board has a power to assist with the provision of retirement accommodation for those who have served in the stipendiary ministry. This is contained in section 26 of the 1961 Measure, as amended by subsequent legislation.

  7.  The limitation of the scope of that power can give rise to a difficulty in a case where a couple who are being assisted with housing by the Pensions Board divorce in retirement. Whilst the Pensions Board is able to continue to assist the person who is receiving a Church pension, it is not able to assist the ex-spouse if the marriage is legally terminated.

  8.  The Pensions Board wishes to be in a position to be even-handed in the on-going provision of housing if the marriage of a couple receiving such assistance breaks down. The purpose of this Clause is to place it in that position.

Clause 4

  9.  The Incumbents (Vacation of Benefices) Measures 1977 and 1993 provide that, at retirement, a pension should be augmented so that a period of receipt of compensation should be treated as if it had been pensionable service. The Diocesan Board of Finance is responsible for the cost.

  10.  The Pastoral Measure 1983 similarly contains provisions for compensating an incumbent dispossessed of his or her benefice by virtue of a pastoral scheme. These include treating the period between dissolution and pension age as if it were pensionable service. The cost of the pension rights is to be paid by the body responsible for the compensation, namely the Diocesan Board of Finance.

  11.  The new Measure clarifies the position in both respects in relation to the Funded Pensions Scheme, the establishment of which post-dates the Measures mentioned above, by adding to the list of bodies responsible for pension contributions set out in the Pensions Measure 1997 ("the 1997 Measure").

Clause 5

  12.  The 1997 Measure:

    (a)  limited the Commissioners' pension liabilities to those arising from service before the end of 1997;

    (b)  created a funded scheme into which dioceses (through funds raised from parishes) pay clergy pension contributions in respect of service from and after 1 January 1998; and

    (c)  gave the Commissioners power until 2004 to give financial assistance to Diocesan Boards of Finance and others in taking on the cost of clergy pensions.

  13.  The 1997 Measure also gave the Commissioners power until the end of 2004 to spend capital in meeting their pensions liabilities. In doing so, it allowed the Commissioners to preserve a significant amount of support for the Church's active ministry, including that in the neediest parishes.

  14.  Clause 5 of the Measure substitutes a new section 7 in the 1997 Measure to give effect to the Commissioners' proposals.

  15.  New section 7(1) is needed to preserve the ability of the Commissioners under the present section 7(1) of the 1997 Measure to spend capital until 31 December 2004 to meet the cost of grants under section 6 (which enables the Commissioners to make transitional grants to a responsible body, in order to assist that body's contributions to the new funded pension scheme). That power would otherwise fall away, were the new provisions set out in the remainder of Clause 5 to come into force before the end of 2004.

  16.  New section 7(2) extends for a period of seven years from 1 January 2005 the power to use the Commissioners' capital for the two purposes currently permitted until the end of 2004 by section 7(1)(a) and (b) of the 1997 Measure. (These purposes ("the specified purposes") are, respectively, the payment of clergy and staff pensions in respect of service before 1998.)

  17.  New section 7(3) reproduces section 7(2) of the 1997 Measure. That re-enactment is needed, for technical reasons, in the event of the substitution for section 7 of the new provisions set out in Clause 5.

  18.  Clause 6 of the Measure effects a number of repeals consequent upon the amendments to be made by clauses 1 to 4.

  19.  Clause 7 deals with the short title, commencement and extent of the Measure.




 
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