4 February 2010
SIS OB Ltd, a subsidiary of Satellite Information Services, which less than two years ago acquired the BBC's outside broadcast division, has opened consultations with staff to close their final salary pension scheme.
The company proposes to close the scheme to future accruals from 1 April 2011
Writing to staff on 18 January 2010, the company argued that market conditions, the burden of pension liabilities and 'continued exposure to funding risks' meant that it could no longer continue to operate the scheme in the longer term.
The company proposes to close the scheme to future accruals from 1 April 2011.
A 60-day consultation period with BECTU opened on 22 January. During this period BECTU officials will be focussed on examining whether the company has, as it states, 'considered all of its available options.'
SIS OB Ltd was formed in March 2008 to take on the BBC's outside broadcast business following its sale to Satellite Information Services by the then wholly owned BBC subsidiary, BBC Resources.
Was closure of the scheme always part of the company's plan?
Extensive representations by BECTU in the run up to the sale secured protections for staff terms and conditions; these included agreement that the final salary pension scheme would continue to operate for three years.
The company has said that it will offer staff a money purchase defined contribution scheme as alternative pension provision should it be confirmed that the defined benefit (DB) scheme will close.
Management's correspondence with staff also claims that closure of the DB scheme would be an important step in securing the business and winning future contracts and would free up the company to reward its staff more flexibly.
"We are also seeking to increase flexibility in how we reward staff performance. In particular, the continued presence of the Scheme impedes the ability of the Company to award salary increases, due to the additional financial burden on the Scheme caused by doing so." wrote Jim Campbell, director.
The consultation is set to conclude on 22 March. One area of agreement between the company and BECTU on this issue concerns participation in the consultation process. Both sides have urged staff to express their views.
BECTU is encouraging members to play an active role in the process and to support their representatives as they progress the discussions.
Satellite Information Services' agreement with BBC Resources, accepted by staff in March 2008, also committed to protect established redundancy terms until 2012.
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