CIPFA treasurer quits over pension deficit concern

CONCERN over CIPFA’s strategy to control its pension deficit has driven the institute’s treasurer to quit his role.

Ian Perkin, who became well known for blowing the whistle on data issues at St George’s Hospital Trust prior to a tribunal ruling that he had been unfairly dismissed, has quit with a year left on his term in the honorary role.

He was elected by members as treasurer in 2010, with one of the key planks of his manifesto being to raise the issue of CIPFA’s pension deficit – which currently stands at nearly £20m under FRS 17 accounting rules.

His election afforded Perkin a role as chairman of CIPFA’s group board, where he could influence and raise issues regarding its pensions strategy. However, as he began his fourth year as honorary treasurer, the group board role was removed.

Perkin is now calling on CIPFA to commit to using a large portion of any profit from the sale of its Robert Street head office next year to pay down the deficit.

“There should be a substantial surplus, my view is there should be a commitment to pay off 20% of the [balance sheet] deficit. The scheme is heavily invested in equities, we could quite easily see the equity market crash and the deficit would shoot up,” said Perkin.

CIPFA’s 2013 annual report states that the deficit “poses a long-term issue” for the institute, but it plans to fund the deficit over the next 14 years. New student numbers have doubled in the past year (to 812 from 394), while it is looking to expand its international reach.

A CIPFA spokesman said: “It is a shame that Ian has decided to resign from his role as honorary treasurer, but we should be clear that this is because he wasn’t made chair of the group board and not for any other reason.

“The decision to separate the role of group board chair and honorary treasurer was taken with the agreement of full council as no other accountancy institute links the two roles and it is not best governance practice.

“It is unfortunate that Ian has chosen to muddy the waters with other issues, especially as in his capacity of chair of the board he helped guide, form and sign off the strategies that he is now criticising.”

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  • Ian Perkin

    Interesting that Cipfa says the only reason I resigned was because I was removed from Chairmanship of the Cipfa Group Board. Their outgoing President presumably did not read the three page letter I sent to her explain in detail my concerns and why I felt I had no alternative but to resign. Perhaps that is why the current President and CEO decided not to allow me to have a letter published in the in house Cipfa magazine to explain to those members who voted me into the post why I felt I had no option but to resign. Why has the Cipfa leadership not got the confidence to let me explain my position and then explain to the members who voted for me why they think I am wrong? Surely Cipfa members have the right to have the facts placed before them and can come to their own conclusions. In the absence of any alternative method of communication, I will put a link explaining my reasons for resignation in detail on my twitter account @Perkin11 in the few days and I hope that Cipfa members in particular will read it. Why do I think it is important that they do? Because I was the only honorary officer elected to his post by a vote of the wider membership and the paper that brought about the rule change that said that Hon Treasurer no longer needed to Chair the Group Board, stated that undesirable outcomes were possible, “in an appointments process which is based upon election rather than selection”. In other words the Cipfa leadership do not trust their own members to elect the right candidate!!!!

  • Geoffrey Wolf

    how can any long term investment be expected to prosper without a considerable proportion of it being in equities. A decent spread should in theory be all that’s required..

    • John Drover

      GW asks: “(How) can any long-term investment be expected to prosper without a considerable proportion of it being in equities?”

      Under normal market conditions that would be a reasonable observation but we are not operating in free markets at present. The markets are being manipulated by central banks by the printing of money to inflate asset prices and give the appearance of economic recovery. Before we can safely invest in anything we need the return of free markets.

  • Sanchi

    Deficit repayment should be the first priority, buy I wonder without any more background information (such as which equities CIPFA invested in) if it would be wise to come to a conclusion.

  • Ian Perkin

    Will publish the written reasons I gave the Cipfa President in writing for my resignation via a link on my Twitter Account Perkin11@ this weekend