Periods of Grace and Interim Ministers

What is a Period of Grace?

If you cease to employ any active members and a cessation event occurs, but you intend to employ an active member in the future, you may give the Trustee of the pension scheme a ‘period of grace’ notice.

The notice must be given as soon as possible (and in any event within two months) after the cessation event. If you do not request the period of grace within two months, the employer debt becomes due in full, so it is very important to meet the timescales.

A template covering all the necessary points can be downloaded below:

  Period of Grace Request Letter

Please send your request for a period of grace to the scheme administrators, Lane Clark & Peacock

During the period of grace, you will be treated as if you were still an employer of active members.  It is as though a cessation event had not occurred.

The period of grace begins when you cease to employ any active members and lasts for 12 months.  However, the  Trustee of the pension scheme may agree to extend the period to a maximum of 36 months.

If you employ an active member during the period of grace, the period of grace ends and you will be treated as if the cessation event had not occurred.

If you do not employ an active member by the last day of the period of grace, then you are treated as if the period of grace had not existed. This means that a cessation event will be treated as having occurred at the date when you ceased to employ at least one active scheme member and the employer debt becomes due in full.

The Pensions Regulator has made it clear that an employer should only use a period of grace in "genuine cases of intended employment of active members and not as a means to delay calculation or payment of any employer debt that may arise".

What happens if the church or other employer has not employed a new member of the scheme by the end of the period of grace, but still intends to employ one?

It is not uncommon for churches to have extended periods of vacancy between ministerial appointments.  The scheme rules recognise this by allowing for the appointment of an Interim member at the end of the period of grace, provided that there is still a genuine intention to employ another permanent member of the scheme.

LCP at team-baptistadmin@lcp.uk.com can provide full details of what you need to do to appoint an Interim member.  To be eligible, the person you appoint must be either a current contributing member of the scheme or receiving a pension from the Baptist Pension Scheme, and must be under age 75.