The head of the housing sector's pension scheme has said housing associations that are pulling out of final salary pension schemes are making a huge mistake.
Richard Stroud is chief executive of the Pensions Trust, which runs the Social Housing Pension Scheme (SHPS) on behalf of 700 registered social landlords.

SHPS is a final salary pension scheme, increasingly rare these days, and RSLs are facing higher contributions to maintain the value of SHPS pensions because of poor stock market performance. Three associations last week chose to pull out of the scheme.

Hampshire's Atlantic Housing Group, London's St Pancras & Humanist Housing Association and Shaftesbury Housing Association in Surrey are among RSLs to opt for money-purchase as opposed to final salary schemes.

But Stroud said associations that have closed the scheme to new employees in favour of cheaper pensions are being rash.

He said he did not think that the true cost of having ageing members had been fully explained to the RSLs. He also thought they should have sought advice from the Pensions Trust before making any final decisions about their pensions.

A Shaftesbury spokesman explained: "Take-up of the SHPS was never very good. Our stakeholder scheme is more affordable for members of staff."

The decision followed a year-long consultants' study, the spokesman added.

The true cost of having ageing members has not been fully explained to RSLs

Richard Stroud, chief executive, Pensions Trust

But Stroud said: "I think they are being given the advice they want to hear."

He also accused the rebel associations of undermining the spirit of the 23,000-member SHPS, set up 25 years ago to ensure workers could move between RSLs without sacrificing their pensions.

Stroud said although RSLs now faced higher costs, they had all benefited from "significant partial pensions holidays" during the boom years.

And he said he hoped RSLs remaining in the scheme would include the SHPS logo in job adverts so those outside the scheme would find it harder to recruit good-quality staff.

National Housing Federation pensions expert Stephen Duckworth said: "It's very highly valued by employees. I would hope RSLs would look at all the options, including putting up their contributions, as an alternative."

Stroud's attack comes as the TUC considers industrial action in support of final salary schemes.