The representative body for barristers, the Bar Council, has proposed a 12% fee hike for practising certificates at the Bar in order to plug a hole in pension funds. It wants to raise fees until 2021 when it projects it can eliminate its existing deficit.
According to the body’s consultation documents, the pension deficit is now between £3.7m-£5.4m due to significant increases in pension liabilities driven by low bond yields indirectly arising from low interest rates. The range of possible deficit values is due to uncertainties in the level and timing of future bond yields.
The Bar Council said it needs to raise an additional £1.3m to fund pensions for its staff, which means an increase in practising certificate fees of £13 for the lowest earners and £198 for the highest. For example a barrister in the highest band, band six, earning more than £240,000, will pay £1,850 in 2017, a £198 rise on the year before.
The proposals, which were approved by the Bar Council Finance Committee by unanimous vote, have also been reviewed by the Bar Standard Board. The proposals will be finalised in December following consultation and then submitted to the Legal Services Board.
According to the documents, the Bar Council had already imposed a levy between 2010 and 2013 which raised £6.5m. However, it said: ‘This levy has proved to be inadequate in the current economic circumstances. After 2021, the body said it would aim to cut fees so that it collects £1.1m per year. Eventually this could allow it to build a buyout fund to discharge the pension liability completely – although it added that this could ‘take ten years’.
The Bar Council intends to set a spending budget of £13.9m for 2017/18, £400,000 less than the current year. Its direct spending budget will fall by £100,000 to £3.7m, with headcount dropping by three.