Charities are being urged to be proactive to avoid being overwhelmed by new pension costs that could arise as a result of changes in regulation.
The Charity Finance Group is warning that the new regulations, which are expected to come into force next year, will significantly change how charities and other employers fund their defined benefit pension schemes.
The changes could mean that charities have less time to deal with shortfalls in their pension scheme and will have to increase annual contributions.
Under the new rules, there will be two approaches to funding pensions, said the CFG: a standardised and prescriptive “fast track” approach, which could impose tough funding targets, or a more complex “bespoke” approach, where charities and other employers would need to spend time and money justifying why they need to be treated differently.
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