Supplementary comments and explanations
on the re-submission of the Church of England (Pensions) Measure
PART I: GENERAL
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
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".
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 importanceas 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 Measurethat of an Order subject to
the negative resolution procedurewas 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
concernthe 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.
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.
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
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
17. The Measure was given Final Approval
on a division by Houses. The voting figures were as follows:
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.
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
24 July 2002
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
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
Fundthe General Purposes Fundwas 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
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.
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
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").
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
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.