BBC announces pension changes

The BBC has announced that it is to close its final salary pension scheme to new members.

The proposals announced by Director-General Mark Thompson would see the closure of the final salary pension scheme to new members from August 31, 2006.

The proposals also include plans to raise the pension age from 60 to 65, for all benefits built up after March 31, 2006.

Under the proposals, members' contributions to the pension scheme would also increase, rising from 5.5% to 6% on September 1 and to 7.5% on April 1 next year.

Member contribution rates would be reviewed again following the 2007 valuation and, subject to approval from the Pension Trustees, a further increase of up to 1.5% might be added from April 1 2008.

In an email to BBC staff, Mr Thompson said: "Pressure on the funding of pension schemes has increased for all employers over recent years. Improved life expectancy, anticipated lower investment returns, plus mounting legislative requirements have all served to increase the cost of providing a pension.

"The BBC pension scheme is currently healthy, but it is reaching the end of its surplus and the risks associated with funding a final salary scheme on the scale of ours have affected the affordability of the scheme.

"The BBC pension scheme has a special place in our reward package and it provides valuable benefits. I also believe it's important to the BBC as an organisation - helping us attract and retain the talented people we need to provide great services for the public.

"But the pressures on the scheme mean that for it to remain secure and affordable, we have to make some changes both to its benefits and to the level at which it is funded by the BBC and its members. Doing nothing is not an option."

However, unions have criticised the plans.

Jeremy Dear, General Secretary of the National Union of Journalists, described the proposals as a "bitter blow" for staff. He said: "The BBC will create a two-tier workforce, force some staff to work longer and expect all staff to pay more for the privilege of doing so. All those under 50 face paying more and working five years longer simply to get the same pension. The BBC's promises have been shown to be worthless and it is hardly surprising staff are reacting with anger.

"The pension scheme is cash-rich, in surplus and the BBC admit there is no crisis - so why are they seeking to penalise staff in this way. It is all the more galling that staff are being asked to pay up to £20 million a year more when the BBC themselves have saved more than £1 billion by paying reduced contributions since 1992.

"The BBC should halt the planned changes. The NUJ will consult with members over the coming days and our reps will meet next week to consider their response. What is clear is we will not accept attempts to make staff pay for the BBC's failure to properly fund the scheme."

(KMcA/GB)