Financial information

Why is this appeal necessary?

Each diocese has a duty to look after its retired priests.  In years gone by there were relatively more ‘Mass goers’ in relation to the number of priests to be supported and the “pay as you go” basis with the current year’s collections paying for the current year’s grants to the retired priests coped with the demand.  We now have more retired priests in relation to those giving and this is expected to increase greatly in the next few years.

How have you calculated that £5 million is needed? (Updated October 2016)

 

£  millions

The amount we need to keep those currently already retired through sickness or above 75 years old on their current grant level

3.2

 

 

The amount that needs to be provided for those under 75 currently in ministry, but taking into account annual contributions which will be payable

3.4

Total

6.6

Less:

 

The current value of the Sick and Retired priests Fund

4.5

 

 

 

 

Amount needed to be raised by the Appeal to date

2.0

 

 

 

 

 If no fund raising was done then the existing fund would eventually run out, although the exact timing of this would depend on a number of factors and principally on the number of priests deciding to postpone their retirement.  If we raise the £5 million proposed then we would have sufficient capital to provide for all priests already retired and a pro rata amount for those currently working.  This amount takes into account the need for a relatively small on-going contribution per priest to ensure that the fund, when he retires, will have sufficient funds to pay for his retirement without affecting the financing of the retirement of other priests.  Further, and more importantly, the fund then would have a robust basis which would ensure that for the future the system set up would provide for all retiring priests, however many, or however few, for whom the Diocese had to provide. 

The assumptions made above include a 40 year working life and a grant of £6,000 per annum, and adjustments have been made, for example, for those priests who are known to have pensions from earlier employments. 

For the on-going contributions a 12.05 year expectation of life at age 75 and a 40 year working life with a grant of £6,000 per annum in retirement indicates a basic annual contribution, for the future, of around £1,800 per priest per annum when he is working.  However this will be subject to minor adjustments each year as the condition of the fund is recalculated to take into account deaths and retirements.

This calculation has many assumptions but we needed to begin somewhere and the amount being sought is in line with similar appeals in dioceses elsewhere round the country.

Download this and other Questions and Answers Questions and Answers July 2013

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