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24 March 2011

The BBC confirmed yesterday (23 March) the official deficit figures for the staff pension scheme. Management's proposals for addressing the deficit sparked a major dispute with staff in 2010.

The BBC advised senior officials from BECTU and the NUJ that the official deficit figure in the corporation's scheme stands at £1.6bn following the latest triennial review (completed in 2010).

Senior management also confirmed that once the scheme changes negotiated with the unions last year are factored in that the deficit will reduce to £1.1bn.

No further talks

At the conclusion of protracted negotiations last year the BBC confirmed that it would reopen talks with the joint unions (BECTU, the NUJ and Unite) if the pre-change deficit figure stood at £1.5bn or less; as a result of yesterday's announcement those talks will not now take place.

Commenting on the developments, Gerry Morrissey, BECTU general secretary, who attended the briefing with the NUJ's Jeremy Dear,  said:

"We note the information provided; it does seem convenient that the official deficit level is just above the figure which would have triggered further talks, however we accept that the assumptions agreed by the BBC and the scheme trustees are in line with parameters recognised by other schemes and recognised actuarial practice."

Recovery plan

The BBC also gave details of the recovery plan agreed with the trustees which, in addition to the expected employer contributions, will see a sum of £900m repaid over a period of 11 years to clear the deficit.

The BBC's employer contributions in respect of future service for active members will be set at 15.5 per cent until January 2012 when the figure will reduce to 14.5 per cent.

Actuarial assumptions

Senior management explained that the following assumptions informed the agreement with the scheme trustees:

  • Future inflation of 3.7 per cent (compared with a figure of 3 per cent at the 2007 actuarial review);
  • Future investment returns in excess of inflation of 3 per cent per year before retirement and 1.4 per cent after retirement (compared to figures of 3.6 per cent and 2.25 per cent respectively in 2007);
  • Life expectancy at age 60 of 28.2 years for men and 28.8 years for women (compared with 26.5 years for men and 29.1 years for women in 2007).

The BBC also advised union officials that prior to the changes agreed last year the pension scheme was funded to 83.7 per cent; the changes, accepted by the majority of staff and due for implementation next month, will improve the funding level to 87.9 per cent.

Since talks with the unions were concluded last October, individual BBC staff have been offered a one to one meeting with a pensions consultant and a seminar to explain the scheme. 

Some staff have questionned the extent of the advice provided by the BBC and have appealed for more assistance.This issue will be raised at a further meeting with senior management next week.

Amended 13.00 25 March 2011.

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