7 July 2010
BECTU has produced a list of Q&As for BBC staff the vast majority of whom are affected by the BBC's current stance on pay and pensions. The list will be updated as the unions'campaign progresses.
Q: Is BECTU proposing to fight the pensions proposals?
A: Yes we are holding a series of meetings with our sister unions, the NUJ and Unite, across the country seeking the views of our members. We are asking members to support the joint unions demand that the value of any past pension should be fully protected and not devalued. (The most effective way for staff to support the campaign is to join BECTU). If this guarantee were to be given by the BBC then the unions would be willing to enter into negotiations with the BBC on ways of reducing the deficit.
Q: Would BECTU consider proposing a maximum cap on pensions?
A: There are numerous alternatives that need investigation including putting a maximum on the pension that could be paid to a person upon their retirement.
Q: Was the BBC legally obliged to review the pension schemes now?
A: No. BBC managers were obliged to review the schemes no later than June 2011. However they chose to conduct a review more than 12 months early and at a time when the stock market was at a very low level. We estimate that if the valuation had been done now that the deficit would be at least £300m lower than the figure of £1.97bn being quoted by the BBC.
Q: Why did the BBC do the review early?
A: It is BECTU’s view that the BBC deliberately used the worst set of stock market figures available in order to make the deficit look bigger than it is. Secondly, looking ahead, it is likely that the BBC will need to recruit several hundred new staff in Salford in 2011. Implementation of these proposals, to the proposed timescale, would deny new staff the right to join the Career Average Scheme. In addition, the government has asked former minister, John Hutton, to do a review of public sector pension provision; the early indications are that pensions already earned by public sector workers could be fully protected. Therefore, it is in the BBC’s interests to implement their less favourable proposals prior to the publication of John Hutton's report.
Q: I have only been in the BBC a couple of years and I am in my twenties, therefore these proposals will not affect me very much, will they?
A: These proposals will affect younger members of staff who intend having a career at the BBC more than longer term employees. The likelihood is that the younger staff member will be promoted at least once during their employment; according to the BBC's proposals, salary increases on promotion will not count for pensionable pay where the increases are higher than 1% in that year. Also, even without a promotion, because the younger member of staff has more working years ahead of them, the gap between their pensionable pay and their actual salary will be significantly greater than those colleagues with fewer years left to work.
Q: What happens to AVCs and Added Years?
A: All existing arrangements will be honoured. However the BBC will not enter in to new arrangements with staff who are not already participating in the AVC scheme or purchasing Added Years.
Q: I currently work part-time but may consider going full-time in the future; what salary will the 1% cap be based on?
A: The 1% cap will be based on the full-time equivalent salary.
Q: What is the pension trustees role in this process?
A: There is a widely-held assumption that the pension trustees are in some way responsible and/or have endorsed these proposals. The fact of the matter is that these proposals are being driven by BBC management. The trustees were told about the proposed changes but were not consulted.
Q: Why have the schemes moved from surplus to deficit in just 5 years?
A: In the mid-nineties the pension scheme was so far in surplus that it risked being taxed under Inland Revenue rules. The trustees and the BBC agreed to reduce contributions from around 21% to 8%, split equally between employees and BBC. At the BBC's request the scheme funded pension augmentation for early retirees which rapidly eroded the surplus. In 2004 the pension scheme ceased to fund augmentation since the surplus was almost exhausted at this point. The trustees asked the BBC to increase its contributions but it declined to do this until 2008. (This is the 13 year pensions holiday that people keep referring to). By 2008 the scheme was in deficit. The deficit has worsened due to a number of factors including the increase in longevity and the overall reduction in the value of the schemes' assets.
Q: Can you clarify some confusion created by the BBC Pension Scheme Summary Report?
A: - This report has caused a lot of confusion. Members are reading that the increase in value of the fund from £6.5bn in 2009 to £8.2bn in 2010 means that the deficit should be greatly reduced. What members have overlooked in the report is that the schemes' liabilities have also grown substantially during that period meaning that the deficit has actually increased to the current £1.97bn.
Q&As as at 7 July 2010. More Q&As will be added as necessary as the campaign progresses.