BBC offers fresh concession to ward off strike action

The BBC offered a new concession today to members of its staff who are planning to strike over proposed changes to their pension scheme.

The broadcaster offered to set up a ‘new career average scheme’for workers who belong to its defined benefit pension concerned that the planned changes would reduce the value of their retirement income.

The BBC announced plans to overhaul its defined benefit schemes in June after discovering the deficit had ballooned from £470 million in 2008 to about £2 billion.

It gave existing members of the scheme the choice of either staying in it but having any salary increases used in pension calculations capped at one per cent a year, or leaving the scheme and joining a new defined contribution scheme.

The move brought considerable anger from employees of the BBC and members of the National Union of Journalists, Bectu and Unite voted to strike by more than nine-to-one in protest at the “punitive” changes.

The BBC said today that it had listened to members who had expressed serious concerns about the one per cap on pensionable pay rises and it was therefore offering to set up a new career average pension for them.

The benefits paid out by the new scheme would be lower than those paid out by a final salary one, as workers’ pensions would be based on their average earnings while they were a member of it, rather than their pay immediately before they retire.

But there will be no cap on the level of people’s pay that will be used in the calculations, meaning any pay rises or promotions would be reflected in their pension.

People would accrue benefits at the rate of one sixtieth of their salary each year, the same as under the current system, while pensions in payment would rise each year in line with the lower of Consumer Price Inflation or 2.5 per cent.

The BBC closed its final salary pension scheme to new members in 2006, when it introduced a career average scheme. The schemes have around 23,000 members of whom 17,000 are still contributing.

Workers who opt for the new career average scheme, which will be known as CAB 2011, will be asked to contribute seven per cent of their pay – considerably higher than the four per cent members of the current career average scheme pay, but lower than the 7.5 per cent paid by members of the final salary scheme.

In an email to members Mark Thompson, director-general of the BBC, said: “Pension reform at the BBC is inevitable.

“We have a large current deficit in our scheme and face long term pressures which, without action now, would undermine the scheme and compromise the broader finances of the BBC.”

He added that while CAB 2011 was not a “panacea”, it did go a “significant way” to addressing the concerns expressed during the consultation.

The consultation on the changes to the scheme had been due to finish at the end of this month, but the BBC has now extended it until the middle of November.

During a ballot concluded earlier this month, more than 2,000 journalists working for the BBC at centres across the UK voted in favour of strike action in protest at planned reforms to their pension scheme.

Of around 3,500 NUJ members at the BBC, 2,251 voted in the ballot with 2,107 (94 per cent) voting for strike action and 2,175 (97 per cent) voting for some form of industrial action short of a strike.

A final decision on likely strike dates was postponed to accommodate talks between management and the unions on the new CAB proposals. Talks are understood to have commenced today.

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