Sections

BBC dismisses speculation over pension closure

UK – The BBC today dismissed as “speculation” media reports that it would shut its final salary scheme to new members, and increase retirement age, following a three-yearly actuarial valuation of the roughly £6.4bn (€9.2bn) scheme.

However, the state-owned broadcaster declined to comment on the likelihood that the speculation could become reality.

"We understand that speculation about the BBC Pension Scheme can be very worrying to staff,” according to BBC statement released today.

“It continues to be our intention to publish the actuarial results after Easter and, at the same time, any proposals to ensure the future health of the scheme.”

The BBC told IPE that, contrary to media reports, this valuation is entirely routine, like the many three-yearly valuations before it.

Watson Wyatt is carrying out the valuation for the pension fund.

“One important purpose of a regular actuarial valuation is to look into the future to ensure the scheme remains healthy,” said the BBC statement.

Furthermore, no decisions will be taken regarding the scheme until the valuation, market trends and the current health of the scheme is taken into account.

Sunday papers reported the BBC was planning to implement a career average salary scheme for new members, and employees under 50 would have to work until 65 instead of 60.

Ahead of these claims, broadcasting unions such as Bectu have also threatened imminent and widespread strike action if these reported proposals are instituted.

“The BBC scheme is healthy, and cash positive - that
is, more money is paid into the scheme each year than is paid out,” according to the BBC statement.

The BBC pension scheme has roughly 21,000 members, contributing £100m annually. The scheme pays out about £25m per year.

In 2003, the pension fund started increasing member contributions by 0.5% per year to prevent sudden and high contribution rates in the future – the contribution rate is currently pegged at 6%.

The BBC “BBC continues to believe that a strong and healthy pension scheme is an important part of the BBC's reward package. We will communicate fully the conclusions of the latest actuarial valuation to members of the scheme, and to the unions, as soon as we can," the BBC continued.

The FRS17 deficit of the BBC scheme for the last three financial years was £426.8m (2005), £436.3m (2004) and £1.074bn (2003).

Last week, the Co-operative Group decided to shut its final salary scheme and merge its existing schemes into a single roughly £5bn career average salary fund - the Co-operative Group Pension (Average Career Earnings) Scheme.

Have your say

You must sign in to make a comment

IPE-QUEST

Your first step in manager selection...

IPE-Quest is a manager search facility that connects institutional investors and asset managers.

Begin Your Search Here