星空传媒

Housing association staff pay has risen by 拢22m more than expected, the sector鈥檚 main pension provider has reported.

A review of the social housing pension scheme, which covers more than 700 housing associations, found members鈥� pay increased by an average of 9.4% a year over the two years from 2002 to 2004 鈥� double what had been predicted.

The unexpectedly large rises will increase liabilities for the scheme, run by the Pensions Trust. It provides final-salary pensions and higher salaries mean higher payouts in future.

The trust is assuming the large pay rises are a one-off that can be covered by high returns on investments. However, it may act if big pay awards continue.

At present, members with low pay rises are subsidising the pensions of those with bigger increases.

Options to reduce this cross-subsidy could include asking employers that give particularly big pay rises to make additional contributions, or capping the level of pay increases taken into account in pension payments.

However, Trevor Smith, consultant at the Pensions Trust, said discussions were at a very early stage.

The pay figures contradict housing鈥檚 image as a sector that gives low wage rises. The biggest increases, of about 11%, were for workers in the 拢40,000 to 拢60,000 wage bracket. The smallest, of about 7%, were for employees on less than 拢20,000 a year.

Smith said some of the increases could be attributed to promotions and job moves.

鈥淭here鈥檚 some catch-up in the movement. We get the impression there are similar numbers of people working but they are higher-paid people. There鈥檚 also stock transfer going on pushing up salaries,鈥� he said.

The review also showed that the scheme had slashed its deficit by 拢72m to 拢45m.

The scheme was found to be 拢117m in deficit in September 2002 while the stock market was in the doldrums (HT 25 April 2003, page 14).

However, its investments have since risen to 拢909m 鈥� 拢94m more than expected. The scheme also has 4465 new members paying into it and just 881 new pensioners.

In addition, the scheme has made a one-off allowance of 拢55m because it now believes members will live longer than previously expected. Adjusted for that allowance, its deficit is 拢100m.