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Memo to The Methodist Council

By Dan Williams,2014-07-10 17:54
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Memo to The Methodist Council ...

    MC/07/24

TO: The Methodist Council

FROM: Nigel Wrighton, Pensions Manager

DATE: 10 July 2010

SUBJECT: Methodist Ministers’ Pension Scheme (MMPS) and Lay Employees’

    Pension Scheme (LEPS)

    The Methodist Council is asked to consider the following two matters in connection with the

    above pension arrangements:-

    1. MMPS - Rule Amendment re Eligibility for Membership

     The Trustee of MMPS is faced with a potential problem arising from new legislation

    intended to facilitate mobility of workers within the EU. For example, employees of

    multi-national companies can remain members of their employers’ pension schemes whilst working in any EU member state. However, in order for this to happen a UK

    pension scheme must first register with the Pensions Regulator as a “cross-border

    scheme”. In order to obtain registration, schemes must satisfy certain conditions. The

    main condition (and the one that constitutes the potential problem) is that a scheme

    must be fully funded at all times and be subject to an annual funding check. In the

    case of MMPS this would be an onerous condition to meet because the Church would

    need to increase its contributions to MMPS to meet any future funding deficit

    immediately.

     The ministers currently serving in EU states outside the UK are: Colin Barratt

    (Germany), Augusto Giron (Italy), David Morris (Malta), Trevor Hoggard (Italy) and

    Conrad and Sonia Hicks (Republic of Ireland). These ministers are all members of

    MMPS and the Trustee had to decide when the new legislation was implemented in

    2006, whether or not it was necessary to register as a cross-border scheme. Under the

    legislation if all members of a UK pension scheme working overseas (in EU member

    states) are “seconded employees” (as defined) then the pension scheme will not be

    operating cross-border. A “seconded” employee is an employee who is sent by a UK

    employer to work overseas for a limited period up to 5 years, in another EU member

    state, and at the end of that period, either intends to return to resume work for that

    employer in the UK or retire.

     After carefully examining the circumstances of each of the ministers serving in other

    EU member states, the Trustee of MMPS concluded that they should be regarded as

    seconded employees and therefore it was not necessary to apply for registration as a

    cross-border scheme. However, the Trustee has been advised by its legal adviser and

    Actuary that it should review the continued membership of any minister whose

    secondment exceeds five years and the total period of any secondment should not

    cause the Trustee to consider that it is really a permanent posting.

     For the future, whilst it is likely there will never be more than a few ministers serving

    outside the UK in other EU member states, the potential problem remains and could

    have serious consequences. The Trustee is therefore proposing to amend the rules of

    MMPS to give it a specific power, after consultation with the Methodist Council, to

    remove a member from the Scheme or to prevent a minister or deacon becoming a

    member, if he or she is stationed outside the UK in an EU member state and cannot be

    regarded as a seconded employee. The proposed amendment will allow the Trustee, if

    necessary, to set conditions on membership on the advice of the Actuary, for example,

    on what can be done to minimise the effect of the suspension or termination of

    membership for the person concerned if this were to happen.

     As the proposed rule amendment alters the eligibility for membership of the Scheme,

    the change must be made by Conference. The Conference has not delegated its

    powers to amend the eligibility criteria of MMPS to the Methodist Council. The rule

    amendment has therefore been drafted in the form of a resolution of Conference

    (attached).

     The Trustee believes that it would be sensible to discuss the issue of eligibility in any

    particular case with the Council and not for the decision, in any particular case, to have

    to be put to Conference.

     The Council is asked to recommend to Conference the passing of the resolution

    to amend the eligibility rule of MMPS.

    2. Lay Employees’ Pension Scheme Appointment of Directors

     The constitution of the Trustee Company of the Scheme provides for a Trustee Board

    consisting of seven directors, four of whom are appointed by the Methodist Council and

    three by members of the Scheme. The current directors are:-

     Employer-nominated: Colin Pearson (Chairman), Brian Mansfield, Mervyn Harvey and

    one vacancy.

     Member-nominated: Reg Everest, William Seddon and Geoffrey Young.

     The vacancy on the Board arises following the retirement of David Lindsay on

    31 August 2006. The Board are recommending to the Methodist Council the

    appointment to the Board of Graham Danbury, a solicitor who is currently a member of

    Law and Polity Committee. Mr Danbury has confirmed that he is willing to serve on the

    Pensions Board. He has provided the following profile:-

     “I am aged 61 and a Solicitor and Notary Public in general practice in St. Albans. My

    main areas of work are property, wills and trusts and some work for Charities. For

    25 years I was the partner responsible for finance and accounts in the firm. I am one of

    the Deputy Coroners for Hertfordshire.

     I have been a member of the Methodist Church all my adult life. In the local Church I

    have served as Steward and Treasurer. At Circuit level I have been Finance Steward

    and Circuit Meeting Secretary. In the District I was Secretary of the former General

    Purposes Committee, and currently Complaints Officer. I am a member of the

    Connexional Law & Polity Committee, and one of the panel who advise the

    Safeguarding Officer on blemished disclosures.”

    63547579.doc

Council is asked to appoint Graham Danbury to the Trustee Board of the Lay

Employees’ Pension Scheme of the Methodist Church.

63547579.doc

    METHODIST MINISTERS’ PENSION SCHEME

    Resolution of Conference

In accordance with Rule A16, the Conference resolves to amend the Rules of the

    Scheme with effect from 1 September 2007.

    1. The letter “(a)” shall be inserted before the words in Rule B1.

2. Rule B1 shall be extended by including a new paragraph (b) as follows:

     “(b) Any person who is a European Member of a European Survivor shall only

    become eligible to join the Scheme, or to remain a Current member as the

    case may be, by permission of the Trustee after consultation with the

    Methodist Council and on such conditions as may from time to time be

    determined by the Trustee on the advice of the Actuary.” 3. A new definition shall be included in Part A of the Appendix as follows:

     ““European Member” and “European Survivor” shall have the meanings given to

    them respectively in The Occupational Pension Schemes (Cross-Border Activities)

    Regulations 2005 or any amendment or statutory modification thereof.”

63547579.doc

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