Proposed changes to the BBC Pension Scheme

I feel sick, you've just stolen my pension. At least be honest about it, to say that you've delivered ' a Pension Scheme that is sustainable, affordable and flexible for BBC staff' is not true. You have ended the final salary scheme, all that money I've already paid into it will be eroded by inflation unless I (and thousands like me) join the Defined Contribution Plan. I'm so angry and feel utterly betrayed by the BBC.

The health of a pension scheme is a product of its liabilities as well as its assets. Given that people are living longer did the BBC not make a massive mistake in increasing the Pension scheme liabilities through early retirement of such substantial numbers of relatively young staff? Perhaps what needs reform is not the Pension scheme itself but the way BBC Management use it as a way of avoiding doing their jobs properly.

I think everyone needs to be going to visit their financial advisor. Unfortunate events will always arise but there are ways to mitigate the effects if you look.

you stoped paying massive amounts to tv presenters and alike. its all

ways the people at the bottom of the ladder who losses out. how much have you spent on all thoughs hundreds you sent to south africa lineker,hanson sheera ect,ect,expences payed for, i bet all these people

think they have won lotto,give the money to those who work hard and deserve it

What does this sentence mean?



"For the next 90 days, the BBC will consult fully on these proposals with staff, the unions, musicians unions and Equity."



Why will you consult with the Musicians Union or Equity about pension arrangements? Do you not understand the types of contracts that actors and musicians have with the BBC? How do you consult with staff other than via the recognised Unions - BECTU, NUJ and Unite?

I find it interesting that Zarin used the expression "reform" in connection with the BBC Pension Scheme. Despite the misreporting in several newspapers, which the BBC appears to have done nothing to correct, the BBC actually closed its final salary scheme to new members two years ago.



If there is an area where the public is crying out for reform it is here:



https://www.telegraph.co.uk/culture/tvandradio/5750277/Top-BBC-executives-will-enjoy-pensions-costing-26m.html



Did the BBC consider capping benefits at say £100k pa?



Thought not.



It is also notable that the BBC Trust, acting on behalf of the licence payer has ordered the BBC to "reform" BBC senior pay by -8.5% p.a. for two years and to speed up the removal of senior managers.



I do not think that either BBC staff or the Licence payer wish to be lectured on "reform" by people whose own situation is in such dire need of it.

Zarin:



The reforms of the pension scheme needs to be done to keep it solvent...Question: What is the options if the Unions, BBC Staff and other entities don't like that often, what is next?



(d)

Does anyone know if the BBC will be facilitating independent financial advice for members ? - there are very tricky decisions to be made if these proposals take effect. Getting the right advice is essential and not all advisors thesedays have a good understanding of defined benefit schemes

Perhaps Zarin would have something to say about this quote from Jeff Randall



https://www.telegraph.co.uk/finance/economics/7880312/The-cure-is-painful-work-harder-save-more-and-spend-less.html



That was certainly the case when I worked for the BBC between 2001 and 2005. After two years there, I was invited to join the final-salary pension scheme. As I read the terms and conditions, I could hardly believe my eyes. It was like being offered the chance to play a one-armed bandit that was calibrated to pay out much more than was put in.



Submitting the form to a pensions manager, I pointed out that my contributions to the collective pot would be drained off after only three years of retirement; thereafter, someone else would be bankrolling me. No amount of investment genius by the fund's managers could fill the gap if I lasted until I was 78 (average life expectancy for white males). My observation was met with considerable irritation: "The BBC pension facilities are extremely well run and a fundamental part of contractual benefits."



What more could a boy do? It was a fill-your-boots moment. I went away grateful that I had been allowed into such a generous club, but convinced that it was heading for a stonking deficit. Sure enough, seven years later, the BBC's pension fund has a £2 billion hole and management has finally admitted that the shortfall is not going to be eliminated by wishful thinking.

https://www.telegraph.co.uk/finance/personalfinance/7909050/BBC-executives-receive-extra-pension-cash.html



A rapid rebuttal would be a good idea. I'm not holding my breath.



"Mark Thompson, director general of the BBC, along with eight executive board members are understood to have access to a multi-million pound pension fund, while other members are excluded."

Hi Laura



Thanks for the relatively swift reply. However in the interests of clarity would you please be specific about where these exceptional payments are 'clearly' reported in the Annual Accounts. Directing me to the overall document is hardly helpful in the context of a BBC attempting to show that it is open and transparent.



Regards



Willis

Hi Laura



I appreciate that you are probably just another ordinary BBC member of staff doing their job but the page you directed me to has no specific information about contractual payments to augment the pensions of Senior staff.



If this information is as clearly signposted as Lucy Adams says, and I bear her no ill will either, she is only doing her job, then the information would be easy for you or I to find.



I have done a cut and past of the text on F24:



NOTES TO THE GROUP FINANCIAL STATEMENTS

CONTINUED

F24

EMPLOYEE BENEFITS

Defined contribution plans

The amounts charged as expenditure for the defined contribution plans represent the contributions payable by the BBC for the accounting periods.

Defined benefit plans

The defined benefit plans, of which the majority of staff are members, provide benefits based on final, or career average, pensionable pay. The assets of the BBC’s main pension scheme are held separately from those of the Group.

On retirement, members of the BBC’s main pension scheme are paid their pensions from a fund which is kept separate from the group. The BBC makes cash contributions to that fund in advance of members’ retirement.

Pension scheme assets are measured using current market bid values. Pension scheme liabilities are measured using a projected unit credit method and discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liability.

The difference between the value of the pension scheme assets and pension scheme liabilities is a surplus or a deficit. A pension scheme surplus is recognised to the extent that it is recoverable and a pension scheme deficit is recognised in full. The movement in the scheme surplus/deficit is split between operating charges, finance items and, in the statement of total comprehensive income, actuarial gains and losses. Generally, amounts are charged to operating expenditure on the basis of the current service cost of the present employees that are members of the BBC Pension Scheme.

Termination benefits

Termination benefits are a component of restructuring provisions and are recognised as an expense in accordance with the accounting policy for provisions.

Other employee benefits

Other short and long term employee benefits, including holiday pay and long service leave, are recognised as an expense over the period in which they accrue.

RESERVES

The operating reserve is the accumulated surplus to date.

Other reserves represent the value of a put option exercisable by minority shareholders.

The hedging reserve is used to record the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred (net of tax). The translation reserve is used to record exchange differences arising from the retranslation of the net assets and results of overseas subsidiaries.

SERVICE LICENCE REPORTING

Service licences are used by the BBC Trust to regulate the BBC’s services and ensure that each aims to provide public value and contribute to delivering the BBC’s public purposes. Note 2 provides more detail on how costs are allocated to individual services.

USE OF ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Executive Board to exercise judgement in applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions or estimates are significant to the consolidated financial statements are disclosed below:



Regards

Willis

Hi Laura



I am not easily shocked but the information (especially the footnotes) printed on page F98 tells a very different story from the one Lucy gave.



See what you think.



Regards



Willis

Hi Laura



I don't expect you to get a decent answer any time soon. I will post an analysis in a couple of days.



Regards



Willis

From Page F96



"For those who joined the Pension Scheme after 31 May 1989 earnings are subject to the maximum annual limit (£123,600 per annum for 2009/10). No maximum annual limit is applied to those who joined on or before 31 May 1989. The Pension Scheme provides for early retirement on medical grounds

and life assurance of four times pensionable pay up to a

prescribed limit.

A variety of arrangements were put in place, for members of the Executive Board who joined on or after 1 June 1989, and whose pensionable pay exceeds the maximum annual limit, including funded and unfunded arrangements outside of the Pension Scheme. Since 1 April 2006 these arrangements have been replaced by a cash supplement paid to each Director on pensionable salary above the maximum annual limit. See

Table 4."



The information does not appear on Table 4. It appears on Table 3 with a confusing footnote(5) which seems to imply that these payments are related to salary sacrifice.



The statement on page F96 gives the impression that these 'other remunerations' only apply to members of the Executive Committee whereas in fact they are much more widespread. Some reports claim that another 30 executives receive these payments.



I understand that the BBC is not speaking to the press on this matter, which rather limits what can be discussed on a blog like this.



The problem is that mistakes have been made in the reporting of these payments in the Annual Report which make the BBC look either shifty or incompetent.



Best regards

Willis

Best thing to do is start with the bosses then go lower

Hi Laura / Bridget



Ok, I'm not quite sure what you are committing to do but I will await developments. Thank goodness this is all electronic and you do not rely on paper copies any more.



Regards



Willis

So here we are, a week on, and the Annual Report still gives the impression that the FURBs were something to do with Salary Sacrifice.



And now this:



https://www.telegraph.co.uk/culture/tvandradio/bbc/7943138/BBC-threatens-pensions-refuseniks-with-pay-freeze-for-ever.html

Well obv. deeply impressed with comment 25. [Personal details removed by Moderator]

Lets try again.



Sorry Bridget I have no idea why a comment from a web editor would fall foul of the moderation rules. Clearly this blog is being moderated by a machine. I believe that a number of members of ExCo could be similarly substituted with a massive gain to the common weal.

Hi Bridget



Aha! Glad that's cleared up. Any progress on the FURBs?



Willis

No wonder the BBC value of openness is getting a bye ball here.



https://blogs.telegraph.co.uk/finance/neilmidgley/100007405/whod-want-to-be-a-trustee-of-the-bbc-pension-fund-not-me/



"If I were a trustee of a pension scheme, and my principal obligation were to protect the benefits of its members, and the scheme’s employer threatened to slash those benefits for decades to come, I think I might do more than take legal advice. To be fair to Peat, he went on to say that he was also seeking a QC’s opinion. Hmm. My recollection of the law of trustees’ obligations is dim at best, but I think I might be looking for a declaration from a judge that I’m doing the right thing."



So Ms Patel - not looking good.

Not so much selling off the family silver as taking out a big mortgage on it.



https://www.ft.com/cms/s/0/dab950ba-b3ad-11df-81aa-00144feabdc0.html