UK – The head of broadcaster BBC today announced plans to shut the BBC’s roughly £6.4bn (€9.2bn) final salary scheme to new members and increase the pension age from 60 to 65.

“Doing nothing is not an option,” director-general Mark Thompson told staff in a memo.

The proposed changes include closing the scheme to new members from September 2006 and bumping up the BBC’s contribution from 7.5% to 17.3% in April next year.

Member contributions will also increase from 5.5% to 6% at the start of September, and again to 7.5% in April 2007.

Furthermore, all pension benefits from 31 March 2016 onwards will be paid at 65 rather than 60.

A new defined benefit ‘career average’ scheme will be introduced for all new members from September.

The proposed changes follow on the back of a recent triennial valuation carried out by consulting firm Watson Wyatt.

Thompson blamed increasing funding pressures, longevity, anticipated lower investment returns, “mounting” legislative requirements and high costs for the changes.

According to reports, unions have labelled the proposals a “bitter blow” for BBC staff.

Broadcast union Bectu told IPE they are “quite angry” with the BBC proposals, which they feel are not entirely justified for a healthy pension scheme with a surplus.

“We are not opposed to change as long as it is justified,” said the spokesperson.

Bectu will consult with its members next Thursday regarding what course of action to pursue.

According to Thompson, the BBC scheme is “healthy” but reaching the end of its surplus. Furthermore, risks associated with funding such a large final salary scheme have affected its affordability.

“I believe that these proposals can both secure the continuation of the pension scheme and also strike a fair balance between retention of a highly valued benefit and our responsibility to the licence fee payer,” said Thompson.

He added: “But I’d like to hear your views too.”

According to the memo, the consultation period began today with a view to implementing the proposed changes from September.

In other news, rail workers’ unions are threatening strike across the networks this summer if steps are not taken to protect workers’ pensions.

Several rail workers’ schemes are in the red, according to union bosses, who have warned the strikes could bring networks to a halt.

According to reports, the Rail, Maritime and Transport union (RMT) and the Transport Salaried Staffs' Association (TSSA) have given employers a 10-day ultimatum to meet their demands, including keeping schemes open and capping staff contributions.