The new regulations will come into effect from 6th April 2018 and will create new “Deferred Debt Arrangements” which will enable charities currently in multi-employer defined benefit pensions schemes to stop accruing liabilities and put in place plans to pay off the debt.
The government’s decision to introduce new regulations specifically referenced the need to support charities in these scheme and government’s response to the consultation on the regulations further referenced the support of charities. This comes after several years of campaigning by Charity Finance Group alongside members and corporate experts for the government to change the rules to prevent charities being trapped with unsustainable debts.
Andrew O’Brien, Director of Policy and Engagement, Charity Finance Group said:
“This isn’t everything we wanted, but it is solid progress and will provide a pathway for many charities to stop accruing more pension debt and to get on top of their liabilities.
We are also pleased that the government has listened to our concerns about the potential barriers that the previous draft regulations could have created for mergers between charities with multi-employer pension scheme debts. We believe that the assurances in this response will ensure that the new rules do not create barriers to charities coming together where that makes sense for beneficiaries.
This has been a long road and we need to make sure that pension trustees make use of the flexibility provided by these new regulations. However, this is good news for charities and demonstrates the value of persistent campaigning with government.”
Notes to Editors
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