01 May 2007
The Church Commissioners increased their contribution towards non-pensions support for the Church of England by 6.4 per cent in 2006, a year when the retail price index rose by 4.4 per cent.
Details of how the Commissioners support the Church’s ministry are set out in their Annual Report & Accounts for 2006, published today.
After 100 years at Millbank, staff have now moved out of the central London site, sold to the House of Lords for £65 million. They moved in March 2007, three months after the Commissioners achieved another year in the top three per cent of 240 similar investment funds.
Last year’s returns of 13.6 per cent outperformed the industry comparator group* average of 10.5 per cent. The fund now has a record of outperforming the comparator group average not only over the last five and ten years, but also over the last 20 years.
The Annual Report details the contribution that the Commissioners make to the ministry of each of the Church’s 44 dioceses, in addition to their major role of funding all clergy pensions earned before 1998. It includes supporting the ministry of bishops and cathedrals, as well as parish ministry particularly in poorer dioceses. Around 100 Commissioners’ staff have joined other staff of the National Church Institutions in refurbished offices in Church House, Great Smith Street, Westminster.
Non-pensions expenditure on support for the Church’s ministry (including support for ministry within dioceses and the ministry of bishops and cathedrals) totalled £69.9 million in 2006 - an increase of £4.1 million on the previous year.
Andrew Brown, Secretary to the Church Commissioners, said: “The strong long-term performance of our investments has enabled us to further our mission to support the Church, particularly in areas of need and opportunity.
“To this end, the Commissioners contributed around 17p in the pound towards the cost of running the Church of England last year.”
Over the past ten years, the Commissioners’ total return on their investments has averaged 10.7 per cent compared with 8.0 per cent per year for the industry comparator. As a result, the Commissioners are now able to distribute to the Church £43 million more each year than would have been the case if the investments had performed only at the industry average. Over five years, the fund averaged 10.4 per cent against the comparator group’s 8.3 per cent. Over twenty years, the average is 10.2 per cent against 9.9 per cent.
The Commissioners are responsible for managing £5.36 billion of assets - a mixture of UK and global equities; rural, commercial and residential property; bonds and cash; and loans for Church purposes.
Total expenditure in 2006 was £172.6 million (£166.1 million in 2005), with the Church Commissioners continuing to provide significant support for the Church's ministry, especially in areas of need. Since it began in 2002, the parish mission fund has given dioceses extra resources for parish ministry totalling £19.6 million, including £4.5 million in 2006. Administrative costs were further reduced and spending was maintained or increased in all other areas.
Achievements in 2006
To help meet tomorrow’s challenges, the Commissioners have:
- continued to meet their long-term objective to achieve an average annual return of at least five per cent per annum above inflation.
- increased global equities holdings through increased investment in emerging markets and reduced the fund’s over-exposure to residential property, while maintaining the present broad balance between equities and property.
- initiated a programme of diocesan regional seminars, with the Archbishops’ Council’s National Adviser for Mission and Evangelism, exploring how the forthcoming Dioceses, Pastoral and Mission Measure will enable local churches to promote new opportunities for mission.
- produced guidance on carrying out local buildings audits for dioceses, deaneries and parishes involved in strategic reviews and looking to extend the use of church buildings to meet the needs of local communities.
- completed the first full year of public hearings of representations against schemes and orders by the Pastoral and Redundant Churches Committees.
1.The Annual Report & Accounts 2006 is available on the Church Commissioners' website at http://cofe.anglican.org/about/churchcommissioners/annualreport/ . The printed version is available on request.
2. The table setting out the Commissioners’ contribution to the dioceses is on page 49 (page 51 of the pdf version).
3. The 17 April press release announcing the Church Commissioners’ results for 2006 can be found at: http://www.cofe.anglican.org/news/pr3107.html.
4. *(See para four) The comparator group is the WM All Funds Universe. 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 240 funds in the 2006 Universe and there were 185 and 153 funds that have been included in the sample for the last five and 10 years respectively.
5. 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)
6. The Commissioners' fund is a closed fund, taking in no new money.
7. Actuaries assess the Commissioners' fund in detail every three years (with yearly reviews) to advise on how much they can safely plan to spend.
8. Administrative costs have been reduced by approximately 40 per cent in real terms in the last 10 years.
9. The Church Commissioners manage assets worth more than £5.3 billion on behalf of the Church of England. The portfolio of assets includes stock market investments, and commercial, residential and rural property investments.
10. 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 diversified 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; in doing so to pay particular regard to making “additional provision for the cure of souls in parishes where such assistance is most required”.
- to administer the legal framework for pastoral reorganisation and settling the future of redundant churches.