The Church Commissioners achieved a return of 13.6 per cent on their investments in 2004 - placing them in the top three per cent of more than 700 similar funds.*

Over the past ten years, the Commissioners’ total return on their investments has averaged 11.1 per cent per year, compared with 7.9 per cent per year for the industry benchmark.

This places the Commissioners in the top one per cent of funds in the benchmark group for the decade, and compares with average earnings increasing by an average of 4.1 per cent a year and an annual increase in the retail price index of 2.7 per cent.

As a result of this above-average performance over the last ten years, the Commissioners’ asset value is £1.3 billion higher at £4.3 billion, and the fund is able to distribute £37 million more each year to the Church than if the investments had performed only at the industry average over the last ten years.

Andrew Brown, Secretary of the Church Commissioners, said: “The portfolio’s sound long-term performance reflects both our well-balanced portfolio with its mix of assets and the strength of the Commissioners’ stock selection.

“The Church Commissioners exist to serve the Church and we are pleased that the good performance enables us to fulfil our responsibilities and make a contribution to the work of every diocese in the Church of England.”

The strong performance in 2004 results from returns in UK equities (13.1 per cent); global equities (5.2 per cent); bonds (6.6 per cent); commercial property (18.8 per cent); rural property (21.1 per cent); residential property (21.9 per cent) and residential value-linked loans (16.5 per cent).

Serving the Church

In 2004, the Church Commissioners continued to provide significant support for the Church's ministry, especially in areas of need. Over the last three years, the parish mission fund has given dioceses extra resources for parish ministry totalling £10.0 million, including £4.2 million in 2004.

The Commissioners' total expenditure in 2004 was £163.8 million (£164.0 million in 2003).

The main items were (with 2003 figures in brackets):

·    £100.2 million (£98.3 million) for clergy pensions based on service before 1998

·    £1.5 million (£3.7 million) transitional help for dioceses and parishes with the cost of clergy pension contributions

·    £27.1 million (£26.4 million) for parish ministry, mainly payments to dioceses for clergy stipends

·    £18.5 million (£17.8 million) for bishops' stipends, office and working costs, and housing

·    £6.1 million (£6.1 million) for stipends of cathedral clergy and grants to cathedrals, mainly for staff salaries

·    £8.0 million (£8.4 million) for administration and restructuring costs, support for other Church bodies and church buildings

In the previous year, 2003, the Church Commissioners achieved their best investment results since 1999, reflecting the sharp recovery in stock markets during much of that year and a good year for property. There were positive returns in all asset classes and the fund saw a total return of 17.0 per cent. Assets were worth £3.9 billion at the end of 2003.

The Annual Report and Accounts of the Church Commissioners are expected to be approved by their Board of Governors in April, and will be published then.

Notes

*(See para one) The WM All Funds Universe is the benchmark against which the Commissioners’ fund is compared. It is a collection of the investment results of UK pension funds and is widely used as an independent measure of the performance of funds. There were 744 funds in the 2004 Universe and there were 435 and 289 funds that have been included in the sample for the last five and 10 years respectively.

The Church Commissioners
·    The Commissioners fund all clergy pensions earned before 1998. (Pensions earned since then are paid from the separate Funded Scheme, which is funded by contributions from dioceses and other Church bodies)
·    The Commissioners' fund is a closed fund, taking in no new money.
·    Actuaries assess the Commissioners' fund in detail every three years (with yearly reviews) to advise on how much they can safely plan to spend.
·     Administrative costs have been reduced by approximately one third in real terms in the last 10 years.

The Church Commissioners manage assets worth more than £4 billion on behalf of the Church of England. The portfolio of assets includes stock market investments, and commercial, residential and rural property investments.

The Commissioners’ mission is to support the Church of England's ministry, particularly in areas of need and opportunity. Their main responsibilities are:
- to obtain the best possible long term return from a diverse investment portfolio in order both to meet their pension commitments and to provide the maximum sustainable funding for their other purposes such as support for the work of bishops, cathedrals and parish ministry.
- to administer the legal framework for pastoral reorganisation and settling the future of redundant churches.