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UK unions warn of BBC pensions strike

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  • UK unions warn of BBC pensions strike

UK - Trade unions have warned they may resort to industrial action if the BBC continues with plans to raise employee contributions, despite a £275m surplus.

Figures from the BBC annual report for 2007/08 reveal the £8bn defined benefit (DB) BBC Pension Scheme showed an increased surplus from £13m in 2005 to £275m at its most recent actuarial valuation on April 1 2007.

Trustees of the scheme had previously recognised that because of funding commitments in 2006-07, the BBC would not be able to pay contributions to the pension scheme at the full rate until April 1 2007. Instead it agreed to a series of inflation-linked 'repair payments', of £23m a year for eight years to make up the estimated £150m shortfall expected by 2007.

But strong performance, together with the surplus, mean the BBC no longer needs to continue with the payment plan - estimated at a total £184m - and instead has received a refund of its first £23m payment.

However, the National Union of Journalists (NUJ) and the Broadcasting Entertainment Cinematograph and Theatre Union (BECTU) claimed that while the BBC "pockets the £184m windfall", it is continuing with plans to raise employee pension contributions from 6% to 6.75% in April 2009, and to 7.5% by April 2010.

Paul McLaughlin, the national broadcasting organiser at the NUJ, said: "Despite all this good fortune the BBC still thinks that your contributions should be going up, and the only reason for raising your contributions is so the BBC can pay less into the scheme".

He pointed out that without the payment plan the BBC is effectively receiving a 3% reduction in its pension bill, and although the latest actuarial valuation recommended employer contributions should be increased by 0.56% to 19.65%, this means the BBC will still save 2.5% or £19m a year on pensions.

It is believed the BBC intends to use the £184m "windfall" as part of a contingency pot to deal with future corporate risks, although the unions argued this could increase further as a rise in employee contributions of 0.75% reduces the BBC's pensions costs by an additional £5.6m a year.
 
McLaughlin told members: "it is wrong that the BBC should refuse to share any of the windfall. Even more galling is the fact that the increase in members' contributions is not because the scheme is in difficulties but is driven by the BBC's desire to make savings on the pension bill."

The unions claimed that in January the BBC agreed a decision on increased member contributions should be reviewed once the results of the actuarial valuation were published, but the organisation has now decided not to revisit its position and is pressing ahead with the contribution increases.

However, it has been suggested that the decision to raise contributions may have been influenced by the volatility in investment markets since the 2007 valuation, as well as increasing longevity, which makes it prudent for the BBC to ensure it has the means to deal with future increases in funding requirements.

That said, both the NUJ and BECTU have "made it clear" to the BBC that this is "unacceptable", although it admitted there is "no reason to ballot members now over a pensions proposal which will have no impact until 1 April 2009".

Although McLaughlin told members "if the BBC still plans to impose the increase we will call a meeting of all chapels with the intention of ballotting for industrial action".

In response a spokeswoman for the BBC said: "An actuarial valuation is a snapshot of the pensions scheme on one day. It is the health of the scheme that is important and we will leave that for members to decide."

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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