BBC to target £2bn pension deficit in scheme overhaul
The BBC yesterday announced plans to overhaul its pension scheme to plug a £2bn deficit.
It is proposing to close the scheme - which offers members a pension based on their average earnings during their career - to new joiners from December 1.
The BBC will keep the pension open to existing members, but Corporation chiefs said it wanted to change the terms so that salary increases used in pension calculations would be capped at 1% a year, even if members received a higher pay rise.
The pension blow to staff follows a recent review of the scheme that discovered the deficit had ballooned from £470m in 2008 to about £2bn.
The broadcaster, which will launch a 90-day consultation over the plans, introduced the current defined benefit scheme in 2006 when it closed the previous more generous final salary pension to new members.
There are currently about 23,000 members in the BBC pension schemes, of which some 17,000 staff are still making contributions.
The BBC is also setting up a new defined contribution scheme for staff once the defined benefit one is closed to new members.
Existing members of the defined benefit scheme will also be able to join the new pension if they want to.
Staff will make contributions of between 4% and 10% of their salary into the scheme, with the BBC adding up to 10%.
But, unlike under a defined benefit scheme, the national broadcaster does not guarantee how much the pension will be worth on retirement, leaving the individual to shoulder all of the risk.
The BBC's chief finance officer Zarin Patel said the changes being proposed to staff members were the most extensive in the scheme's history.
She said: "These are tough decisions, and the first major reform of pensions in the public sector. But we have no option if we are to avoid a new burden on the licence fee payer while ensuring that staff continue to receive what they are due."