CIPD pensions shortfall makes £5m dent in cash pile

A steep increase in pension liabilities has wiped £5m off the value of the CIPD in 12 months, its annual report revealed last week.

But the cash-rich institute still made almost £1m operating profit in the year to the end of June, and boasts £28.8m in net assets.

The body’s defined benefit pension scheme is now a £7m blot on its otherwise sparkling balance sheet.

Changes to accounting rules, an increase in life expectancy and poor stock market conditions caused the pension liability to rise from £2m in June 2007. This dragged down the overall value of the Institute from £33.8m to £28.8m.

Elsewhere, the body increased its income by 10% to almost £40m with strong commercial performance and increased membership, although this was wiped out by higher expenditure.

A spokesman for the Chartered Institute of Personnel and Development told Personnel Today: “We’ve had a very good year. Income is up 10%, commercially we are performing well and membership is growing. We are in the HR business but this shows we know how to run a business.”

CIPD membership numbers grew slightly over the year to reach 133,000, with 51,500 achieving chartered status. The institute has set a target of 150,000 members by 2010, with a substantial increase in those with chartered status.

The CIPD employs 337 people, which equates to 318 full-time equivalents. Of these, 121 work in senior or managerial posts, 17% work part-time, 73% are female, 12.5% are from an ethnic minority and 1.5% have a disability. The average length of service at the CIPD is 5.7 years.

Outgoing chief Geoff Armstrong was paid a total of £428,000 in his final year in charge, made up of £303,000 in salary, including a performance bonus of £23,000, £27,000 worth of benefit, and a £98,000 contribution to his pension.

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