Research has revealed that only 2% of small and medium-sized employers in the arts and leisure industries plan to contribute more than the legislative minimum when they enrol their employees into a workplace pension scheme.
The research by workplace pensions provider NOW: Pensions showed that the figure for the arts was low compared with other sectors.
But as Adrian Babbidge of Egeria Heritage Consultancy points out, auto-enrolment applies only where there is no existing pension scheme, and the phased introduction of the Pensions Act 2008 means that organisations with fewer than 50 employees will not be affected until 2015, so many museums will not yet have considered it.
Pension plan
Tamalie Newbery, the executive director of the Association of Independent Museums (AIM), says that it will affect a lot of organisations and museums should be thinking about it now and planning ahead. AIM itself will be entering the scheme in August 2016.
National, university, local authority and larger independent museums tend to have pension schemes where employers contribute more than required in the auto-enrolment scheme, says Babbidge, so they will not be affected.
The wider issue, he thinks, is the affordability of pensions, particularly where the benefit is linked to final salary.
Many local government pension schemes establish new criteria for contribution levels to make sure the scheme is fully funded and to mitigate the risk of default by employers that are not public authorities.
In London, Babbidge says, pension costs for some charities in local government pension schemes have almost doubled in the past year.
Issues of trust
This has implications for museums moving to trust status. Increasingly, according to Babbidge, museums that were part of local government schemes are introducing defined contribution schemes for new starters.
Where staff have been transferred to the trust and carried over their membership of the local government scheme, increased employer contributions can be an additional strain on finances.
Museums Sheffield, which carried over several employees on the local government scheme when it moved to trust status in 1998, is still making annual payments to close a deficit that stood at £991,000 in March 2013.
Birmingham Museums Trust, which was set up in 2012, is in an “ongoing consultation” with regard to its arrangements for employee pensions.
It is hard to find advice on these issues, says David Dawson, the director of Wiltshire Museum, which was brought to the brink of closure in 2008 by a £420,000 local government pensions scheme liability. Dawson has since advised another museum about its pension deficit, and is aware of others in a similar situation.
The fear of appearing unsustainable prevents museums from being open, he says. After all, what funder wants to fund a pension fund deficit?
The research by workplace pensions provider NOW: Pensions showed that the figure for the arts was low compared with other sectors.
But as Adrian Babbidge of Egeria Heritage Consultancy points out, auto-enrolment applies only where there is no existing pension scheme, and the phased introduction of the Pensions Act 2008 means that organisations with fewer than 50 employees will not be affected until 2015, so many museums will not yet have considered it.
Pension plan
Tamalie Newbery, the executive director of the Association of Independent Museums (AIM), says that it will affect a lot of organisations and museums should be thinking about it now and planning ahead. AIM itself will be entering the scheme in August 2016.
National, university, local authority and larger independent museums tend to have pension schemes where employers contribute more than required in the auto-enrolment scheme, says Babbidge, so they will not be affected.
The wider issue, he thinks, is the affordability of pensions, particularly where the benefit is linked to final salary.
Many local government pension schemes establish new criteria for contribution levels to make sure the scheme is fully funded and to mitigate the risk of default by employers that are not public authorities.
In London, Babbidge says, pension costs for some charities in local government pension schemes have almost doubled in the past year.
Issues of trust
This has implications for museums moving to trust status. Increasingly, according to Babbidge, museums that were part of local government schemes are introducing defined contribution schemes for new starters.
Where staff have been transferred to the trust and carried over their membership of the local government scheme, increased employer contributions can be an additional strain on finances.
Museums Sheffield, which carried over several employees on the local government scheme when it moved to trust status in 1998, is still making annual payments to close a deficit that stood at £991,000 in March 2013.
Birmingham Museums Trust, which was set up in 2012, is in an “ongoing consultation” with regard to its arrangements for employee pensions.
It is hard to find advice on these issues, says David Dawson, the director of Wiltshire Museum, which was brought to the brink of closure in 2008 by a £420,000 local government pensions scheme liability. Dawson has since advised another museum about its pension deficit, and is aware of others in a similar situation.
The fear of appearing unsustainable prevents museums from being open, he says. After all, what funder wants to fund a pension fund deficit?
Auto-enrolment
- Organisations with fewer than 50 employees will not be required to participate until 2015-17.
- Organisations set up after 1 April 2012 will not be required to participate until 2017-18.
- Employees earning less than £10,000 per annum need not be auto-enrolled.
- Employees can opt out of auto-enrolment.
